UPDATE: Deutsche Bank Downgrades International Paper Ahead of Near-Term Challenges

In a report published Friday, Deutsche Bank analyst Mark Wilde downgraded the rating on

from Buy to Hold, and lowered the price target from $54.00 to $51.00. In the report, Deutsche Bank noted, “The biggest issue is evidence of increased capital being invested in domestic c'board capacity (IP's ‘core' business) – both new mills & conversions. Based on our analysis, we think industry operating rates could drop from recent levels in the high 90's to 90% or below by 2015. Without stronger demand, IP could be forced to take more economic downtime or make permanent capacity shuts. In the short-term, the issues are continued sluggish domestic c'board demand, rising inventories and some very modest pricing pressure from new capacity. Trimming IP from Buy to Hold. Reducing PT from $54 to $51.” International Paper Company closed on Thursday at $47.29.