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3 Takeaways From Deutsche Bank's Meeting With International Paper

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Deutsche Bank hosted an investor meeting with International Paper Co's (NYSE: IP) Senior Leadership team at its headquarters last week. The meeting focused on the strategic direction of the company, current fundamentals in the domestic containerboard and box market, and opportunities for IP's consumer business.

Here are three key takeaways Deutsche Bank highlighted:

  • International Paper appears confident on Industrial Packing Fundamentals and is optimistic that demand will grow. "Our meetings with IP pointed to hundreds of millions of dollars in other inflationary costs incurred since the April 2013 price increase, as well as, margin loss on business that has been rebid over a three-year period without any attempts to increase prices," said Deutsche Bank.
  • IP remains focused on domestic container board and fluff pulp, but is also evaluating how some businesses fit within the company's portfolio. "This would include exposure where IP does not have an advantaged position. Using this criteria, it would appear that businesses such as (part of) Consumer Packaging and Brazil Industrial Packaging are under evaluation. We continue to think all options are on the table, including investing to make these businesses advantaged."
  • International Paper places a heavily emphasis on capital allocation strategies, paying down its debt remains a top priority. The company is expected to spend ~$1.5 billion in Capital Expenditures including WY Fluff Pulp needs.

Deutsche Bank maintains its Hold rating and $42 price target on International Paper.

Latest Ratings for IP

Apr 2018RBC CapitalDowngradesOutperformSector Perform
Mar 2018UBSInitiates Coverage OnBuy
Mar 2018Wells FargoDowngradesOutperformMarket Perform

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Posted-In: Deutsche BankAnalyst Color Analyst Ratings


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