UBS Downgrades International Paper to Neutral Amid Rising Costs

Written by Emily J. Thompson, Senior Investment Analyst

Source: seekingalpha

Updated: 6d ago

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IP+4.98%

Should l Buy IP?

Source: seekingalpha

Rating Downgrade: UBS downgraded International Paper from Buy to Neutral, primarily due to rising and prolonged transformation costs that are pressuring earnings and delaying the company's recovery.
Price Target Cut: The bank reduced its price target for International Paper from $51 to $44, arguing that cost savings from the 80/20 program are offset by elevated facility rationalization expenses in North America and Europe.
Earnings Outlook Decline: UBS analyst Anojja Shah now expects EBITDA to fall short of company targets in both 2026 and 2027, with estimates running below market consensus, indicating increased execution risk for the company.
Separation Plan Uncertainty: International Paper's plan to split its U.S. and European businesses into two publicly traded companies raises concerns; while UBS estimates this could unlock about 10% value, the timing may not alleviate investor frustration with earnings volatility and shifting strategies.

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Analyst Views on IP

Wall Street analysts forecast IP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for IP is 48.35 USD with a low forecast of 36.00 USD and a high forecast of 57.80 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

12 Analyst Rating

9 Buy

2 Hold

1 Sell

Moderate Buy

Current: 44.370

Low

36.00

Averages

48.35

High

57.80

Current: 44.370

Low

36.00

Averages

48.35

High

57.80

UBS

Anojja Shah

Buy -> Neutral

downgrade

$51 -> $44

2026-02-02

Reason

UBS

Anojja Shah

Price Target

$51 -> $44

AI Analysis

2026-02-02

downgrade

Buy -> Neutral

Reason

UBS analyst Anojja Shah downgraded International Paper to Neutral from Buy with a price target of $44, down from $51. The firm believes the company's 2026 and 2027 estimates will decline further on "prolonged" transformation costs associated with its cost savings program. International Paper's below-consensus Q1 outlook sets up another back-half loaded year, the analyst tells investors in a research note. UBS says that with Europe entering a "year of footprint actions," the company's cost headwinds look likely to extend into 2027.

Citi

Buy

maintain

$46 -> $47

2026-02-02

Reason

Citi

Price Target

$46 -> $47

2026-02-02

maintain

Buy

Reason

Citi raised the firm's price target on International Paper to $47 from $46 and keeps a Buy rating on the shares. The company reported a "light" Q4 and fiscal 2026 outlook, the analyst tells investors in a research note.

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About IP

International Paper Company provides sustainable packaging solutions. The Company is a global producer of renewable fiber-based packaging and pulp products. Its segments include Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers. Packaging Solutions North America and Packaging Solutions EMEA segments are primarily focused on producing fiber-based packaging. It produces linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft of which a majority of its production is converted into corrugated packaging and other packaging. Global Cellulose Fibers segment primarily focuses on producing cellulose fibers which is a renewable raw material used in a variety of products people depend on every day such as diapers, towel and tissue products, feminine care, incontinence and other personal care products. Its specialty pulps serve as a sustainable raw material used in textiles, construction materials, paints, coatings and more.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.

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