Value
6.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.7 |
| EV/EBITDA | 7.2 |
| Fwd P/E | 8.0 |
| PEG | 4.9 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.0x
- ▸PEG: 1.58
IP · Why this verdict
Why International Paper (IP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
An in-line result in the most recent quarter followed by three consecutive and severe misses, a dividend payout ratio of 508%, and business quality that falls well short of acceptable standards combine to make this a situation where the risk/reward is unfavorable and the setup favors patience over adding exposure at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality measured across margins, returns, and competitive positioning falls well short of the minimum acceptable level, with thin gross and operating margins and no identifiable competitive advantage to suggest structural improvement is imminent. Warnings | Quality score rises above 4.0 for 2 consecutive quarters, accompanied by a measurable improvement in operating margin above its current level. | ↓Deteriorating |
| CounterPackaging and container businesses can experience cyclical margin compression during oversupply periods; if end-market pricing recovers and input costs normalize, the quality picture may improve more quickly than the current readings imply. | ||
A dividend payout ratio of 508% means the company is distributing more than five times its earnings to shareholders, a level that is arithmetically unsustainable and creates balance sheet pressure if earnings do not recover sharply. Catalyst breakdown | Dividend payout ratio falls below 100% for 2 consecutive quarters, indicating that earnings coverage of the dividend has been restored. | ↓Deteriorating |
| CounterIf management views the current earnings trough as temporary and is drawing on balance sheet capacity to maintain the dividend through a downcycle, the payout level may be intentional rather than distressed; a dividend cut may already be anticipated by the market. | ||
Three consecutive misses in the quarters before the most recent in-line result — with the average negative surprise across all four quarters at nearly negative 88% — signal persistent difficulty in translating top-line activity into bottom-line delivery, undermining confidence in forward guidance. Earnings | EPS surprise exceeds positive 10% for 2 consecutive quarters, demonstrating that the earnings miss trend has genuinely reversed. | ↓Deteriorating |
| CounterAn in-line result in the most recent quarter may represent a stabilization in guidance discipline; if management has recalibrated expectations downward sufficiently, subsequent quarters could clear a lower bar and gradually restore credibility. | ||
With only about 1.8% of headroom remaining to the technical resistance target and a reward-to-risk ratio of 0.26 — meaning the downside is nearly four times the available upside — the setup does not offer a favorable entry, regardless of any potential longer-term recovery narrative. Price targets | The reward-to-risk ratio improves above 1.5, supported by a price pullback that opens sufficient distance to the resistance target to justify a new risk/reward entry. | ↓Deteriorating |
| CounterTechnical targets are not fundamental ceilings; if the earnings recovery materializes and analyst price targets are raised substantially, the take-profit level itself could migrate higher, improving the risk/reward without requiring a price decline. | ||
Volume accumulation and an improving MACD suggest incipient buying interest, but the stock remains below its 200-day moving average with the long-term trend slope declining at 5.4% per 30 days — a combination that reflects a potential recovery attempt within a confirmed downtrend rather than a trend reversal. Momentum breakdown | The stock closes above its 200-day moving average and sustains a positive slope for that average over 3 consecutive weeks, confirming that the long-term trend has turned. | ↑Improving |
| CounterMACD divergence and rising on-balance volume are often early indicators that precede a price breakout; if buying accumulation continues, the downtrend that began could resolve into a sustainable recovery before the full technical confirmation criteria are met. | ||
Business quality measured across margins, returns, and competitive positioning falls well short of the minimum acceptable level, with thin gross and operating margins and no identifiable competitive advantage to suggest structural improvement is imminent.
↓DeterioratingWarnings
- Expectation
- Quality score rises above 4.0 for 2 consecutive quarters, accompanied by a measurable improvement in operating margin above its current level.
CounterPackaging and container businesses can experience cyclical margin compression during oversupply periods; if end-market pricing recovers and input costs normalize, the quality picture may improve more quickly than the current readings imply.
A dividend payout ratio of 508% means the company is distributing more than five times its earnings to shareholders, a level that is arithmetically unsustainable and creates balance sheet pressure if earnings do not recover sharply.
↓DeterioratingCatalyst breakdown
- Expectation
- Dividend payout ratio falls below 100% for 2 consecutive quarters, indicating that earnings coverage of the dividend has been restored.
CounterIf management views the current earnings trough as temporary and is drawing on balance sheet capacity to maintain the dividend through a downcycle, the payout level may be intentional rather than distressed; a dividend cut may already be anticipated by the market.
Three consecutive misses in the quarters before the most recent in-line result — with the average negative surprise across all four quarters at nearly negative 88% — signal persistent difficulty in translating top-line activity into bottom-line delivery, undermining confidence in forward guidance.
↓DeterioratingEarnings
- Expectation
- EPS surprise exceeds positive 10% for 2 consecutive quarters, demonstrating that the earnings miss trend has genuinely reversed.
CounterAn in-line result in the most recent quarter may represent a stabilization in guidance discipline; if management has recalibrated expectations downward sufficiently, subsequent quarters could clear a lower bar and gradually restore credibility.
With only about 1.8% of headroom remaining to the technical resistance target and a reward-to-risk ratio of 0.26 — meaning the downside is nearly four times the available upside — the setup does not offer a favorable entry, regardless of any potential longer-term recovery narrative.
↓DeterioratingPrice targets
- Expectation
- The reward-to-risk ratio improves above 1.5, supported by a price pullback that opens sufficient distance to the resistance target to justify a new risk/reward entry.
CounterTechnical targets are not fundamental ceilings; if the earnings recovery materializes and analyst price targets are raised substantially, the take-profit level itself could migrate higher, improving the risk/reward without requiring a price decline.
Volume accumulation and an improving MACD suggest incipient buying interest, but the stock remains below its 200-day moving average with the long-term trend slope declining at 5.4% per 30 days — a combination that reflects a potential recovery attempt within a confirmed downtrend rather than a trend reversal.
↑ImprovingMomentum breakdown
- Expectation
- The stock closes above its 200-day moving average and sustains a positive slope for that average over 3 consecutive weeks, confirming that the long-term trend has turned.
CounterMACD divergence and rising on-balance volume are often early indicators that precede a price breakout; if buying accumulation continues, the downtrend that began could resolve into a sustainable recovery before the full technical confirmation criteria are met.
Per-dimension breakdown
Quality
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.2 |
| Gross margin | 1.9 |
| Op margin | 1.5 |
| Net margin | 0.0 |
| Current ratio | 4.6 |
| Moat | 5.0 |
| Piotroski F | 6.7 |
- ▸No competitive moat
- ▸Quality concerns
Growth
5.8/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.8 |
Momentum
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 9.7 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 10.0 |
| vol acceleration | 8.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
- ▸Volume surge (2.3x avg) on up move
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 5.2 |
| erm sentiment | 5.0 |
Insider
6.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.4 |
| notable moves | 5.0 |
- ▸Negligible insider buying — $313,009 (0.001% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 0.0 |
| growth rank | 6.8 |
Technical
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 5.7 |
Risk (lower is worse)
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.7 |
| days to cover | 1.2 |
| volatility | 2.9 |
| put call | 7.5 |
| implied vol | 2.2 |
| max pain risk | 3.0 |
| beta | 7.6 |
| debt equity | 7.0 |
- ▸High short interest justified: 18%
- ▸High IV: 67%
- ▸Above max pain $28
Catalyst
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.8 |
- ▸Earnings concerns: 0B/3M
- ▸Earnings in 5 days
- ▸Dividend: 4.9%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:8.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.8=NEGATIVE
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- DEATH_CROSS:momentum=8.5>=5.0 recovering
Reward-to-Risk
-0.79
Upside
-11.8%
Downside
14.9%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 63, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.8=NEGATIVE outcome against Momentum at 8.5 and asymmetric R:R of -0.79.
The strongest dimensions are Momentum at 8.5, Value at 6.6, and Insider at 6.5; the weakest are Technical at 2.0, Quality at 2.6, and Catalyst at 3.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.79 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Persistent Earnings Miss Pattern
Trip ifEPS surprise exceeds positive 10% for 2 consecutive quarters.
- P2Quality Below Minimum Threshold
Trip ifQuality score rises above 4.0 for 2 consecutive quarters.
- P3Dividend Payout Unsustainable
Trip ifDividend payout ratio falls below 100% for 2 consecutive quarters.
- P4Unfavorable Risk Reward At Resistance
Trip ifReward-to-risk ratio rises above 1.5 as the stock retreats more than 10% from current levels.
- P5Technical Recovery Amid Structural Downtrend
Trip ifPrice closes above the 200-day moving average for 3 consecutive weeks and the 30-day moving average slope turns positive.