What Happened?
Shares of packaging and materials company International Paper (NYSE:IP) jumped 5% in the morning session after JPMorgan upgraded the stock from Neutral to Overweight and raised its price target to $61 from $51. The analyst firm cited a recent company announcement of a $140 per ton price increase for U.S. kraftliner, a key packaging material, as a reason for the positive outlook. JPMorgan believes this move will significantly improve the company's pricing power and projects a potential 43% upside from the stock's current price.
After the initial pop, the shares cooled down to $44.49, up 4.9% from the previous close.
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What Is The Market Telling Us
International Paper's shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 10.7% on the news that the company reported disappointing third-quarter 2025 results that missed analyst expectations on both revenue and profit. The packaging firm announced revenue of $6.22 billion, falling short of the $6.48 billion consensus forecast. More significantly, International Paper posted an adjusted loss of $0.43 per share, a stark reversal from the $0.56 per share profit that analysts had predicted. The company's profitability took a major hit, with its operating margin swinging to a negative 10.8% from a positive 3.7% in the same quarter last year. This decline was driven by operating expenses growing faster than revenue, signaling a lack of cost control and leading to the sharp investor sell-off.
International Paper is up 10.5% since the beginning of the year, but at $44.49 per share, it is still trading 19.8% below its 52-week high of $55.50 from July 2025. Despite the year-to-date gain, investors who bought $1,000 worth of International Paper's shares 5 years ago would now be looking at only $760.53.
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