What's the outlook for IP's earnings growth?

International Paper (IP) is expected to show a decline in earnings before interest, taxes, depreciation, and amortization (EBITDA) in the near term, but promising signs of growth emerge in the long term. 1. **Short-Term Challenges**: - The estimated EPS for IP in the upcoming quarter ending December 31, 2024, is -$0.07. This indicates a potential loss for the period. - Analysts have set an average price target of $62.67 for IP, reflecting a "Buy" consensus rating. This suggests optimism among analysts for the stock's future performance. 2. **Strategic Initiatives Supporting Long-Term Growth**: - International Paper is targeting an increase in underlying earnings and sales in the coming years by cutting costs, improving commercial operations, and integrating recently acquired DS Smith. - The company aims to boost its adjusted EBITDA to between $5.5 billion and $6 billion by 2027, up significantly from about $2 billion in 2024. - Despite short-term challenges, analysts are impressed by IP's strategic plans and see potential for value creation, as evidenced by bullish comments from JPMorgan and Jefferies. 3. **Market Position and Growth Prospects**: - International Paper is positioning itself for long-term growth, targeting sales between $26 billion and $28 billion by 2027, with a focus on North American and European markets. - The company's efforts to streamline operations, improve efficiency, and enhance customer experience are expected to support long-term total shareholder return growth. In conclusion, while International Paper faces a brief period of earnings decline, its strategic initiatives and optimistic long-term goals suggest confidence in future growth. Investors should monitor the company's execution of its strategic plans and the progress of its cost-cutting and commercial improvement efforts.