IP
International Paper Company
$33.19
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 8.6% above fair value
You pay
$33.19
Bear
$24.46
Fair
$30.57
Bull
$36.68
Bear
$24.46
-26.3%
$2.04 × 12x P/E
Fair
$30.57
-7.9%
$2.04 × 15x P/E
Bull
$36.68
+10.5%
$2.04 × 18x P/E
Adjust Assumptions
15.0x
2.04$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
16.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$48.43
Divergence from AlphaVal
37%
Summary
Applying a 15x P/E to adjusted EPS of $2.04, the base-case value is $30.57 per share.
Warnings
Wall Street's average price target is $48.43 (from 29 analysts). Our estimate is 37% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples