International Paper Insider Sale Sparks Concern, But Is the Stock Still a Buy?

Investors got a jolt this week after Holly Goughnour, International Paper’s (IP) Chief Accounting Officer, sold $336,344 worth of shares via a prearranged 10b5-1 plan. But before you panic-sell, let’s dig into what’s really going on here.

First, the insider sale: Goughnour offloaded 7,500 shares at an average price of $44.85 on May 5, 2025. While insider selling can rattle markets, this wasn’t a sudden "dump." The transaction was part of a 10b5-1 plan, meaning it was preapproved and unrelated to any material non-public information. That’s a key distinction—this isn’t a red flag, just a tax or wealth management move.

But let’s not ignore the broader context. International Paper is in the midst of a major transformation. Just days before the sale, the company broke ground on its largest U.S. box plant in decades in Waterloo, Iowa—a $200 million project targeting the booming protein packaging market. This facility, part of its “80/20” strategy to focus on high-margin markets, will create 65 jobs and align with its push for sustainability.

The company’s Q1 2025 results, released April 30, were a mixed bag. Net sales jumped 24% to $5.9 billion thanks to the DS Smith acquisition, but a $271 million charge from closing its Louisiana mill dragged net income to a $105 million loss. Adjusted earnings, however, rose 13% to $101 million.

Now, let’s look at the stock.

The shares spiked 4.4% on May 2 to $45.84—a rally fueled by optimism around the Waterloo plant and DS Smith’s integration. But by May 5, the stock had slumped to $44.47, pressured by technical resistance and weak volume. Analysts now predict a 17.8% drop over three months, with a target range of $35.93–$42.25. That’s not encouraging, but let’s not forget: International Paper isn’t just a stock—it’s a critical player in packaging, a sector that thrives when economies grow.

Here’s why bulls still have a case:
1. The DS Smith acquisition adds $10 billion in annual sales and expands IP’s global reach.
2. The Waterloo plant targets a high-growth protein packaging market, which is less cyclical than traditional paper products.
3. Debt reduction: IP cut its leverage ratio to 2.8x net debt/EBITDA, making it more resilient to economic dips.

But here’s the catch:
- The Red River mill closure and $271 million charge are painful but necessary. IP is shedding low-margin operations to focus on premium packaging.
- Stock technicals: The May 5 close below $45.68 (April’s support level) suggests more downside.

So, should you buy?

The Verdict: Hold for now. International Paper is executing on its turnaround, but the stock is battling short-term headwinds. The insider sale isn’t a warning bell—Goughnour still owns 31,525 shares, showing long-term confidence. However, with a predicted 17.8% drop and macroeconomic uncertainty, wait for a better entry point. If the stock dips to $40, that’s a “Buy” signal—especially with the Waterloo plant’s 2026 launch on the horizon.

In the end, International Paper isn’t just about paper. It’s about packaging the future—one sustainable box at a time. Just make sure you time your move carefully.