Intrinsic value of International Paper - IP

Previous Close

$58.40

  Intrinsic Value

$116.84

stock screener

  Rating & Target

str. buy

+100%

Previous close

$58.40

 
Intrinsic value

$116.84

 
Up/down potential

+100%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of IP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of International Paper (IP) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -5.75
  12.30
  11.57
  10.91
  10.32
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
  6.86
  6.67
  6.50
  6.35
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
Revenue, $m
  21,079
  23,672
  26,411
  29,293
  32,316
  35,480
  38,783
  42,227
  45,813
  49,543
  53,421
  57,452
  61,641
  65,994
  70,518
  75,222
  80,113
  85,203
  90,500
  96,017
  101,764
  107,756
  114,004
  120,524
  127,330
  134,438
  141,864
  149,626
  157,743
  166,233
  175,116
Variable operating expenses, $m
 
  14,280
  15,893
  17,591
  19,372
  21,235
  23,181
  25,210
  27,322
  29,519
  31,804
  33,842
  36,309
  38,873
  41,538
  44,309
  47,190
  50,188
  53,308
  56,558
  59,943
  63,472
  67,153
  70,993
  75,002
  79,189
  83,564
  88,136
  92,917
  97,918
  103,150
Fixed operating expenses, $m
 
  7,198
  7,377
  7,562
  7,751
  7,945
  8,143
  8,347
  8,556
  8,770
  8,989
  9,213
  9,444
  9,680
  9,922
  10,170
  10,424
  10,685
  10,952
  11,226
  11,506
  11,794
  12,089
  12,391
  12,701
  13,018
  13,344
  13,677
  14,019
  14,370
  14,729
Total operating expenses, $m
  19,603
  21,478
  23,270
  25,153
  27,123
  29,180
  31,324
  33,557
  35,878
  38,289
  40,793
  43,055
  45,753
  48,553
  51,460
  54,479
  57,614
  60,873
  64,260
  67,784
  71,449
  75,266
  79,242
  83,384
  87,703
  92,207
  96,908
  101,813
  106,936
  112,288
  117,879
Operating income, $m
  1,476
  2,194
  3,140
  4,140
  5,193
  6,300
  7,459
  8,670
  9,935
  11,254
  12,629
  14,397
  15,888
  17,441
  19,058
  20,743
  22,499
  24,330
  26,240
  28,233
  30,315
  32,489
  34,762
  37,139
  39,626
  42,230
  44,956
  47,813
  50,807
  53,945
  57,236
EBITDA, $m
  2,703
  3,441
  4,492
  5,603
  6,773
  8,001
  9,287
  10,632
  12,034
  13,497
  15,021
  16,608
  18,260
  19,980
  21,772
  23,638
  25,582
  27,609
  29,722
  31,928
  34,231
  36,636
  39,149
  41,777
  44,526
  47,403
  50,416
  53,571
  56,877
  60,342
  63,975
Interest expense (income), $m
  682
  731
  963
  1,208
  1,465
  1,735
  2,018
  2,313
  2,620
  2,940
  3,274
  3,620
  3,980
  4,354
  4,743
  5,147
  5,567
  6,004
  6,458
  6,931
  7,424
  7,937
  8,472
  9,030
  9,613
  10,220
  10,855
  11,518
  12,212
  12,936
  13,695
Earnings before tax, $m
  956
  1,463
  2,177
  2,932
  3,728
  4,564
  5,441
  6,358
  7,315
  8,314
  9,355
  10,777
  11,908
  13,087
  14,315
  15,596
  16,932
  18,326
  19,782
  21,302
  22,891
  24,552
  26,290
  28,109
  30,014
  32,010
  34,101
  36,294
  38,595
  41,009
  43,542
Tax expense, $m
  247
  395
  588
  792
  1,007
  1,232
  1,469
  1,717
  1,975
  2,245
  2,526
  2,910
  3,215
  3,533
  3,865
  4,211
  4,572
  4,948
  5,341
  5,752
  6,180
  6,629
  7,098
  7,589
  8,104
  8,643
  9,207
  9,800
  10,421
  11,072
  11,756
Net income, $m
  904
  1,068
  1,589
  2,140
  2,722
  3,332
  3,972
  4,641
  5,340
  6,069
  6,829
  7,867
  8,693
  9,553
  10,450
  11,385
  12,361
  13,378
  14,441
  15,550
  16,710
  17,923
  19,192
  20,520
  21,910
  23,367
  24,894
  26,495
  28,174
  29,936
  31,785

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,033
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  33,093
  36,030
  40,199
  44,586
  49,188
  54,003
  59,031
  64,272
  69,730
  75,408
  81,311
  87,446
  93,822
  100,447
  107,333
  114,492
  121,938
  129,684
  137,747
  146,144
  154,892
  164,012
  173,522
  183,446
  193,805
  204,624
  215,927
  227,742
  240,096
  253,018
  266,539
Adjusted assets (=assets-cash), $m
  32,060
  36,030
  40,199
  44,586
  49,188
  54,003
  59,031
  64,272
  69,730
  75,408
  81,311
  87,446
  93,822
  100,447
  107,333
  114,492
  121,938
  129,684
  137,747
  146,144
  154,892
  164,012
  173,522
  183,446
  193,805
  204,624
  215,927
  227,742
  240,096
  253,018
  266,539
Revenue / Adjusted assets
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
  0.657
Average production assets, $m
  6,401
  7,196
  8,029
  8,905
  9,824
  10,786
  11,790
  12,837
  13,927
  15,061
  16,240
  17,465
  18,739
  20,062
  21,437
  22,867
  24,354
  25,902
  27,512
  29,189
  30,936
  32,758
  34,657
  36,639
  38,708
  40,869
  43,127
  45,486
  47,954
  50,535
  53,235
Working capital, $m
  2,601
  2,036
  2,271
  2,519
  2,779
  3,051
  3,335
  3,632
  3,940
  4,261
  4,594
  4,941
  5,301
  5,675
  6,065
  6,469
  6,890
  7,327
  7,783
  8,257
  8,752
  9,267
  9,804
  10,365
  10,950
  11,562
  12,200
  12,868
  13,566
  14,296
  15,060
Total debt, $m
  11,314
  14,593
  18,299
  22,199
  26,290
  30,570
  35,040
  39,700
  44,552
  49,600
  54,847
  60,302
  65,969
  71,859
  77,981
  84,346
  90,965
  97,851
  105,019
  112,484
  120,261
  128,368
  136,823
  145,645
  154,855
  164,472
  174,521
  185,025
  196,007
  207,495
  219,515
Total liabilities, $m
  28,752
  32,031
  35,737
  39,637
  43,728
  48,008
  52,478
  57,138
  61,990
  67,038
  72,285
  77,740
  83,407
  89,297
  95,419
  101,784
  108,403
  115,289
  122,457
  129,922
  137,699
  145,806
  154,261
  163,083
  172,293
  181,910
  191,959
  202,463
  213,445
  224,933
  236,953
Total equity, $m
  4,341
  3,999
  4,462
  4,949
  5,460
  5,994
  6,552
  7,134
  7,740
  8,370
  9,026
  9,707
  10,414
  11,150
  11,914
  12,709
  13,535
  14,395
  15,290
  16,222
  17,193
  18,205
  19,261
  20,362
  21,512
  22,713
  23,968
  25,279
  26,651
  28,085
  29,586
Total liabilities and equity, $m
  33,093
  36,030
  40,199
  44,586
  49,188
  54,002
  59,030
  64,272
  69,730
  75,408
  81,311
  87,447
  93,821
  100,447
  107,333
  114,493
  121,938
  129,684
  137,747
  146,144
  154,892
  164,011
  173,522
  183,445
  193,805
  204,623
  215,927
  227,742
  240,096
  253,018
  266,539
Debt-to-equity ratio
  2.606
  3.650
  4.100
  4.490
  4.820
  5.100
  5.350
  5.560
  5.760
  5.930
  6.080
  6.210
  6.330
  6.450
  6.550
  6.640
  6.720
  6.800
  6.870
  6.930
  6.990
  7.050
  7.100
  7.150
  7.200
  7.240
  7.280
  7.320
  7.350
  7.390
  7.420
Adjusted equity ratio
  0.103
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  904
  1,068
  1,589
  2,140
  2,722
  3,332
  3,972
  4,641
  5,340
  6,069
  6,829
  7,867
  8,693
  9,553
  10,450
  11,385
  12,361
  13,378
  14,441
  15,550
  16,710
  17,923
  19,192
  20,520
  21,910
  23,367
  24,894
  26,495
  28,174
  29,936
  31,785
Depreciation, amort., depletion, $m
  1,227
  1,247
  1,353
  1,464
  1,580
  1,702
  1,829
  1,961
  2,099
  2,243
  2,392
  2,211
  2,372
  2,540
  2,714
  2,895
  3,083
  3,279
  3,483
  3,695
  3,916
  4,147
  4,387
  4,638
  4,900
  5,173
  5,459
  5,758
  6,070
  6,397
  6,739
Funds from operations, $m
  2,549
  2,315
  2,942
  3,604
  4,302
  5,034
  5,801
  6,602
  7,439
  8,312
  9,221
  10,078
  11,065
  12,093
  13,164
  14,280
  15,443
  16,657
  17,923
  19,245
  20,626
  22,069
  23,579
  25,157
  26,810
  28,540
  30,353
  32,253
  34,244
  36,333
  38,524
Change in working capital, $m
  71
  223
  236
  248
  260
  272
  284
  296
  308
  321
  334
  347
  360
  374
  389
  405
  421
  438
  456
  474
  494
  515
  537
  561
  585
  611
  639
  668
  698
  730
  764
Cash from operations, $m
  2,478
  2,092
  2,706
  3,356
  4,041
  4,762
  5,517
  6,306
  7,131
  7,991
  8,888
  9,731
  10,705
  11,719
  12,775
  13,875
  15,023
  16,219
  17,468
  18,771
  20,132
  21,554
  23,041
  24,597
  26,225
  27,929
  29,714
  31,585
  33,546
  35,603
  37,760
Maintenance CAPEX, $m
  0
  -810
  -911
  -1,016
  -1,127
  -1,244
  -1,365
  -1,492
  -1,625
  -1,763
  -1,906
  -2,056
  -2,211
  -2,372
  -2,540
  -2,714
  -2,895
  -3,083
  -3,279
  -3,483
  -3,695
  -3,916
  -4,147
  -4,387
  -4,638
  -4,900
  -5,173
  -5,459
  -5,758
  -6,070
  -6,397
New CAPEX, $m
  -1,348
  -795
  -833
  -876
  -919
  -962
  -1,004
  -1,047
  -1,090
  -1,134
  -1,179
  -1,225
  -1,273
  -1,323
  -1,375
  -1,430
  -1,487
  -1,547
  -1,610
  -1,677
  -1,747
  -1,821
  -1,900
  -1,982
  -2,069
  -2,161
  -2,258
  -2,360
  -2,467
  -2,581
  -2,700
Cash from investing activities, $m
  -3,498
  -1,605
  -1,744
  -1,892
  -2,046
  -2,206
  -2,369
  -2,539
  -2,715
  -2,897
  -3,085
  -3,281
  -3,484
  -3,695
  -3,915
  -4,144
  -4,382
  -4,630
  -4,889
  -5,160
  -5,442
  -5,737
  -6,047
  -6,369
  -6,707
  -7,061
  -7,431
  -7,819
  -8,225
  -8,651
  -9,097
Free cash flow, $m
  -1,020
  487
  963
  1,464
  1,995
  2,556
  3,147
  3,767
  4,416
  5,094
  5,802
  6,450
  7,221
  8,023
  8,860
  9,732
  10,641
  11,589
  12,578
  13,611
  14,690
  15,817
  16,995
  18,228
  19,518
  20,868
  22,283
  23,766
  25,321
  26,952
  28,663
Issuance/(repayment) of debt, $m
  1,861
  3,518
  3,706
  3,900
  4,091
  4,281
  4,470
  4,660
  4,852
  5,047
  5,248
  5,454
  5,668
  5,890
  6,122
  6,364
  6,619
  6,887
  7,168
  7,465
  7,777
  8,107
  8,455
  8,822
  9,209
  9,618
  10,049
  10,503
  10,983
  11,488
  12,020
Issuance/(repurchase) of shares, $m
  -132
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,715
  3,518
  3,706
  3,900
  4,091
  4,281
  4,470
  4,660
  4,852
  5,047
  5,248
  5,454
  5,668
  5,890
  6,122
  6,364
  6,619
  6,887
  7,168
  7,465
  7,777
  8,107
  8,455
  8,822
  9,209
  9,618
  10,049
  10,503
  10,983
  11,488
  12,020
Total cash flow (excl. dividends), $m
  716
  4,005
  4,669
  5,364
  6,086
  6,837
  7,617
  8,427
  9,268
  10,142
  11,050
  11,905
  12,888
  13,913
  14,982
  16,096
  17,260
  18,476
  19,747
  21,076
  22,467
  23,924
  25,450
  27,050
  28,727
  30,486
  32,332
  34,270
  36,304
  38,440
  40,683
Retained Cash Flow (-), $m
  -457
  -452
  -463
  -487
  -511
  -534
  -558
  -582
  -606
  -630
  -655
  -681
  -708
  -735
  -764
  -795
  -826
  -860
  -895
  -932
  -971
  -1,012
  -1,056
  -1,102
  -1,150
  -1,201
  -1,255
  -1,311
  -1,371
  -1,434
  -1,501
Prev. year cash balance distribution, $m
 
  794
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,346
  4,206
  4,877
  5,575
  6,303
  7,059
  7,845
  8,662
  9,511
  10,395
  11,224
  12,181
  13,178
  14,217
  15,302
  16,434
  17,616
  18,852
  20,144
  21,496
  22,912
  24,394
  25,948
  27,577
  29,285
  31,078
  32,958
  34,932
  37,005
  39,182
Discount rate, %
 
  9.10
  9.56
  10.03
  10.53
  11.06
  11.61
  12.19
  12.80
  13.44
  14.12
  14.82
  15.56
  16.34
  17.16
  18.02
  18.92
  19.86
  20.86
  21.90
  23.00
  24.15
  25.35
  26.62
  27.95
  29.35
  30.82
  32.36
  33.97
  35.67
  37.46
PV of cash for distribution, $m
 
  3,984
  3,504
  3,661
  3,735
  3,730
  3,651
  3,506
  3,304
  3,056
  2,775
  2,454
  2,147
  1,842
  1,549
  1,275
  1,027
  809
  623
  468
  342
  244
  169
  114
  74
  47
  29
  17
  10
  5
  3
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

International Paper Company is a paper and packaging company with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia, Africa and the Middle East. The Company's segments include Industrial Packaging, Global Cellulose Fibers, Printing Papers and Consumer Packaging. The Company is a manufacturer of containerboard in the United States. Its products include linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft. The Company's cellulose fibers product portfolio includes fluff, market and specialty pulps. The Company is a producer of printing and writing papers. The products in Printing Papers segment include uncoated papers. The Company is a producer of solid bleached sulfate board. As of December 31, 2016, the Company operated 29 pulp, paper and packaging mills, 170 converting and packaging plants, 16 recycling plants and three bag facilities in the United States.

FINANCIAL RATIOS  of  International Paper (IP)

Valuation Ratios
P/E Ratio 29
Price to Sales 1.2
Price to Book 6
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow 23.2
Growth Rates
Sales Growth Rate -5.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -20%
Cap. Spend. - 3 Yr. Gr. Rate 2.4%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 255.1%
Total Debt to Equity 260.6%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 6.3%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 22%
Return On Equity - 3 Yr. Avg. 17.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 28.1%
Gross Margin - 3 Yr. Avg. 30%
EBITDA Margin 13.6%
EBITDA Margin - 3 Yr. Avg. 13.6%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 7.4%
Pre-Tax Margin 4.5%
Pre-Tax Margin - 3 Yr. Avg. 4.6%
Net Profit Margin 4.3%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 25.8%
Eff/ Tax Rate - 3 Yr. Avg. 25.6%
Payout Ratio 81.1%

IP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IP stock intrinsic value calculation we used $21079 million for the last fiscal year's total revenue generated by International Paper. The default revenue input number comes from 2016 income statement of International Paper. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IP stock valuation model: a) initial revenue growth rate of 12.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.1%, whose default value for IP is calculated based on our internal credit rating of International Paper, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of International Paper.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IP stock the variable cost ratio is equal to 60.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7022 million in the base year in the intrinsic value calculation for IP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.6% for International Paper.

Corporate tax rate of 27% is the nominal tax rate for International Paper. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IP are equal to 30.4%.

Life of production assets of 7.9 years is the average useful life of capital assets used in International Paper operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IP is equal to 8.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4341 million for International Paper - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 412.151 million for International Paper is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of International Paper at the current share price and the inputted number of shares is $24.1 billion.

RELATED COMPANIES Price Int.Val. Rating
WRK WestRock 65.13 165.45  str.buy
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PKG Packaging of A 119.22 212.63  str.buy
CLW Clearwater Pap 37.05 37.94  hold
UFS Domtar 44.88 25.71  sell

COMPANY NEWS

▶ International Paper increases planned investment in Alabama facility   [Feb-07-18 05:20PM  American City Business Journals]
▶ Why You Should Buy Into The Sell-Off   [Feb-06-18 01:30PM  Investopedia]
▶ 3 Dividend Stocks Perfect for Retirees   [11:03AM  Motley Fool]
▶ Don't panic, find the sell-off's opportunities   [Feb-05-18 07:09PM  CNBC Videos]
▶ International Paper tops 4Q profit forecasts   [07:15AM  Associated Press]
▶ How to Trade the Pullback in Timber Stocks   [07:40AM  Investopedia]
▶ International Paper Declares Dividend   [Jan-09-18 04:16PM  PR Newswire]
▶ Graphic Packaging finalizes $6B partnership   [Jan-02-18 03:35PM  American City Business Journals]
▶ IP's packaging deal is done   [03:07PM  American City Business Journals]
▶ IP enters into $660 million credit agreement   [Dec-12-17 03:30PM  American City Business Journals]
▶ How to bet on Amazon without having to pay $1200 a share   [Nov-28-17 10:03AM  Yahoo Finance]
▶ Value-Adding Dividend Stocks To Buy Now   [09:02AM  Simply Wall St.]
▶ Top 3 Stocks for Retirees to Consider   [Oct-30-17 06:13PM  Motley Fool]
▶ Atlanta-based manufacturer inks $6B partnership   [Oct-25-17 03:19PM  American City Business Journals]
▶ IP talks billion-dollar deal, hurricanes and more   [02:00PM  American City Business Journals]
▶ International Paper tops 3Q profit forecasts   [07:21AM  Associated Press]
▶ IP announces $1.8 billion transaction   [Oct-24-17 12:50PM  American City Business Journals]
▶ Roberts awarded CFO Lifetime Achievement Award   [Oct-23-17 12:40PM  American City Business Journals]
▶ 3 Stocks to Help You Build Retirement Wealth   [Oct-14-17 10:31AM  Motley Fool]
▶ IP adds Fortune 500 CEO and public company exec to its board   [Oct-12-17 01:15PM  American City Business Journals]
Financial statements of IP
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