In the latest trading session, International Paper (IP) closed at $46.22, marking a -1.64% move from the previous day. This change lagged the S&P 500's 0.92% loss on the day. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 1.65%.
Heading into today, shares of the global paper and packaging company had gained 9.74% over the past month, outpacing the Basic Materials sector's loss of 3.4% and the S&P 500's loss of 2.56% in that time.
Investors will be hoping for strength from IP as it approaches its next earnings release, which is expected to be February 7, 2019. On that day, IP is projected to report earnings of $1.63 per share, which would represent year-over-year growth of 28.35%. Our most recent consensus estimate is calling for quarterly revenue of $5.86 billion, up 2.6% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.31 per share and revenue of $23.22 billion, which would represent changes of +52.15% and +1.35%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for IP. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.53% higher. IP currently has a Zacks Rank of #3 (Hold).
Investors should also note IP's current valuation metrics, including its Forward P/E ratio of 8.84. For comparison, its industry has an average Forward P/E of 10.65, which means IP is trading at a discount to the group.
Investors should also note that IP has a PEG ratio of 0.93 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IP's industry had an average PEG ratio of 1.84 as of yesterday's close.
The Paper and Related Products industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 39, putting it in the top 15% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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