International Paper Company

Despite high inflation and declining demand in the second half of the year, International Paper managed a fair result. Despite the strong marketing efforts, the company failed to meet the revenue expectations of Wall Street. However, its decent operational execution resulted in an earnings beat. International Paper has made strategic investments to support the profitable development potential across its Industrial Packaging business. Over the next few years, the management is expected to continue to invest in their US box system to add capacity and capabilities to increase earnings and cash generation. In addition, they have made noteworthy progress in generating value-creating returns in their Global Cellulose Fibers business. Another good news for them is that the fundamental demand for absorbent pulp remained steady. The management intends to expand its capabilities in this area. We give the company a ‘Hold’ rating with a revised target price.