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Research Alert: CFRA Maintains Hold Opinion On Shares Of International Paper Company

· 02/04/2021 20:33

01:30 AM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target by $4 to $49, as we assume IP will trade at an EV/EBITDA of 7.4x our 2021 EBITDA estimate, in line with IP's 3-year average forward EV/EBITDA. We raise our 2021 EPS estimate by $0.48 to $3.78 and initiate our 2022 EPS forecast at $4.22. IP posts Q4 adjusted EPS of $0.75 vs. $1.09, $0.06 below consensus; sales also missed consensus by 1.2%. In Q4, IP generated $789 million in cash from operations, bringing the total for the year to $3.1 billion and free cash flow for the full year was $2.3 billion, in line with last year. Debt reduction totaled $611 million in Q4 and $1.7 billion for the year. The 35% decrease Y/Y in adjusted EPS was mostly driven by higher costs related to reliability issues in IP's North American containerboard system and higher input costs and distribution costs. These headwinds were partially offset by stronger volume and lower maintenance costs. In 2021, we expect Industrial Packaging to benefit from broad-based demand recovery, leading to EPS growth of 35%.