International Paper Q4 sales beat expectations, to split into two companies

Overview

• Packaging solutions provider's Q4 net sales beat analyst expectations

• Company plans to create two independent public companies in North America and EMEA

• Preliminary Q4 results include significant goodwill impairment charge

Outlook

• International Paper targets 2026 adjusted EBITDA of $3.5-$3.7 bln

• Company expects Q1 2026 adjusted EBITDA of $0.74-$0.76 bln

• Company plans to form two independent public companies in 12-15 months

Result Drivers

• GOODWILL IMPAIRMENT - A $2.47 bln pre-tax non-cash goodwill impairment charge impacted Q4 results, primarily related to the PS EMEA segment

• NORTH AMERICA PROFITABILITY - PS NA segment saw improved profitability due to strategic customer wins and higher sales prices despite lower volumes

• EMEA CHALLENGES - PS EMEA segment faced lower sales prices and volumes amid a soft demand environment, affecting operating profit

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 3 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the paper packaging peer group is "buy"

• Wall Street's median 12-month price target for International Paper Co is $47.50, about 14.5% above its January 28 closing price of $41.49

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nPn3SHJvta

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