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International Paper (IP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
BancorpSouth (BXS) delivered earnings and revenue surprises of 0.00% and -3.66%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

International Paper (IP) closed at $45.61 in the latest trading session, marking a +1.36% move from the prior day. This move outpaced the S&P 500's daily gain of 1.32%. Meanwhile, the Dow gained 1.38%, and the Nasdaq, a tech-heavy index, added 1.74%.

Prior to today's trading, shares of the global paper and packaging company had gained 13.75% over the past month. This has outpaced the Basic Materials sector's gain of 7.33% and the S&P 500's gain of 4.16% in that time.

IP will be looking to display strength as it nears its next earnings release, which is expected to be January 31, 2019. The company is expected to report EPS of $1.61, up 26.77% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.86 billion, up 2.55% from the year-ago period.

Investors should also note any recent changes to analyst estimates for IP. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.26% lower. IP currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that IP has a Forward P/E ratio of 8.15 right now. Its industry sports an average Forward P/E of 9.21, so we one might conclude that IP is trading at a discount comparatively.

Investors should also note that IP has a PEG ratio of 0.86 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Paper and Related Products was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Paper and Related Products industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 165, which puts it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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