What Happened?
Shares of packaging and materials company International Paper (NYSE: IP) fell 2.3% in the morning session after investor concerns grew as a report highlighted the company as the most shorted stock in the materials sector for the third consecutive month. The report noted that short interest in the company reached 10.04% of its total float. This bearish sentiment appeared to be linked to the company's financial health, which was under scrutiny. International Paper reported a 3-year revenue growth rate of 2.1%, while its earnings per share experienced a decline of 14.9% over the same period. Broader industry headwinds also weighed on the sector, with pulp and paper producers navigating challenges from tariffs and weak demand that squeezed margins.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy International Paper? Access our full analysis report here.
What Is The Market Telling Us
International Paper’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 10.7% on the news that the company reported disappointing third-quarter 2025 results that missed analyst expectations on both revenue and profit. The packaging firm announced revenue of $6.22 billion, falling short of the $6.48 billion consensus forecast. More significantly, International Paper posted an adjusted loss of $0.43 per share, a stark reversal from the $0.56 per share profit that analysts had predicted. The company's profitability took a major hit, with its operating margin swinging to a negative 10.8% from a positive 3.7% in the same quarter last year. This decline was driven by operating expenses growing faster than revenue, signaling a lack of cost control and leading to the sharp investor sell-off.
International Paper is down 30.2% since the beginning of the year, and at $37.10 per share, it is trading 38.3% below its 52-week high of $60.09 from January 2025. Investors who bought $1,000 worth of International Paper’s shares 5 years ago would now be looking at an investment worth $742.55.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.
