Market Update: International Paper Company (NYSE:IP) – International Paper to Acquire Weyerhaeuser’s Pulp Business for $2.2 Billion

[PR Newswire] – MEMPHIS, Tenn., May 2, 2016 /PRNewswire/ — International Paper (IP) announced that it has entered into a definitive agreement to purchase Weyerhaeuser’s pulp business. Under terms of the agreement, IP will acquire five pulp mills and two converting facilities that produce fluff pulp, softwood pulp, and specialty pulp for a number of consumer applications including diapers, other hygiene products, tissue, and textiles. Because the transaction is a purchase of assets, International Paper expects to realize a tax benefit with an estimated net present value of approximately $300 million. Including this benefit, the net price is approximately $1.9 billion. International Paper forecasts annual synergies of approximately $175 million by the end of 2018, which will require the need for one-time costs of approximately $85 million. Read more on this. International Paper Company (IP) , valued at $17.89B, started the session at $43.28. During today’s session, IP traded between $42.88 to $43.68 with a one year range of $32.50 to $54.40. IP shares are currently priced at 12.51x this year’s forecasted earnings, which makes them relatively inexpensive compared to the industry’s 19.20x earnings multiple for the same period. And for dividend hunters, the company pays shareholders $1.76 per share annually in dividends, yielding 4.07%. Consensus earnings for the current quarter by the 16 sell-side analysts covering the stock is an estimate of $0.84 per share, which would be $0.13 worse than the year-ago quarter and a $0.07 sequential decrease. Investors should also note that the full-year EPS estimate of $3.46 is a $0.19 worse when compared to the previous year’s annual results. The quarterly earnings estimate is based on a consensus revenue forecast of the current quarter of $5.33 Billion. If realized, that would be a 6.65% decrease over the year-ago quarter. More recently, Credit Suisse downgraded IP from Outperform to Neutral (Apr 28, 2016). Previously, RBC Capital Mkts downgraded IP from Outperform to Sector Perform. When considering if perhaps the stock is under or overvalued, the average price target is $45.87, which is 5.98% above where the stock opened this morning. See more in (NYSE:IP) Similar Articles: Stock Update: International Paper Company (NYSE:IP) – International Paper Reports First Quarter 2016 Earnings Market Update: International Paper Company (NYSE:IP) – International Paper Signs Agreement to Sell Asian Corrugated Packaging Business Company Update: International Paper Company (NYSE:IP) – International Paper Reports 2015 Fourth Quarter and Full-Year Earnings