Is International Paper Company (IP) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $35.53, International Paper Company (IP) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $26.28 and $107.66 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts International Paper Company's projected free cash flows at a weighted-average cost of capital (WACC) of 8.0%, with a long-run terminal growth rate of 2.5%. About 80% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -1.6% annual revenue growth for IP. Our base case instead compounds to about 2.7% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, IP's modeled DCF value ranges from about $23.02 to $84.12 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what International Paper Company would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of IP's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind IP's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $24,369,000,000 | IP FY2025 10-K (accession 0000051434-26-000055, filed 2026-02-27): PERIMETER-CORRECTED BASE. Reported FY2025 continuing-operations net sales were $23,634M, but DS Smith only joined on 2025-01-31, so that figure carries 11 months of it. The 10-K's own unaudited pro forma note (DS Smith combination as if closed 2024-01-01) gives FY2025 net sales of $24,369M; that is the base used here, so Year-1 growth is organic rather than a January stub. Global Cellulose Fibers (pulp, sold to AIP on 2026-01-23 for $1.5B incl. $190M preferred) is ALREADY in discontinued operations in both figures. Still inside the perimeter and still in this base: PS EMEA ($8,451M of FY2025 sales, ~35%), which IP plans to spin off — see special_cases. CROSS-CHECK: H1 2026 net sales $11,975M, annualising to ~$24.0B before the seasonally stronger second half; FY2024 pro forma was $24,298M, so the combined business has not grown in two years. |
| Base EBIT margin | 5.0% | IP 4Q/FY2025 earnings release, 8-K Ex-99.1 (accession 0000051434-26-000016, filed 2026-01-29): DERIVED, ADJUSTED. IP reports no operating-income line and its GAAP FY2025 is meaningless for a run-rate (pretax loss of $3,368M after a $2,467M EMEA goodwill impairment, $958M of accelerated depreciation on closed mills and $626M of restructuring). Built as adjusted EBITDA from continuing operations $2,976M less UNDERLYING D&A ($2,747M reported - $958M accelerated depreciation = $1,789M) = $1,187M / $23,634M reported sales = 5.02%. Applied to the pro forma base on the assumption the January DS Smith month earned the same margin. Excludes special items and non-operating pension income (pension is handled in net debt). JUDGEMENT FLAGGED: this treats restructuring and severance ($626M in 2025, $104M in 2024) as non-recurring; IP has booked them every year since 2023, so the true run-rate is somewhat lower. CROSS-CHECK H1 2026: adjusted EBITDA $1,264M - underlying D&A ($977M - $39M accelerated) = $326M / $11,975M = 2.7%, a heavy-outage half (Q2 outages ~2x normal, Riverdale conversion). |
| Forecast revenue growth | 0% → 5% → 3% → 2% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide input shared by every researched model. |
| Beta | 0.89 | yfinance 5Y-monthly beta: Published 5Y-monthly beta 0.889, used unadjusted. Two arguments for higher exist and are NOT applied: leverage rose with the all-share DS Smith deal (debt/equity at market ~0.54 now), and most of the regression window predates the combined company. Each +0.1 of beta is worth about -$3.20/share; a beta of 1.0 would take the value to ~$36. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (~long-run nominal GDP), kept for comparability. Not generous for a business whose real volumes have been flat-to-down for a decade, but containerboard prices have tracked inflation over cycles. Well below the ~8.0% WACC. |
| Diluted shares | 532M | IP Q2 2026 10-Q (accession 0000051434-26-000123, filed 2026-08-05): Six-months-to-2026-06-30 weighted-average diluted shares, 531.8M (529.2M basic + 2.6M performance shares). The Q2-alone figure (529.5M) is a LOSS quarter, where dilutive securities are excluded by rule, so it understates the true dilution; the six-month count is the latest period with dilution measured. |
| Market price | $35.53 | Delayed quote · as of 2026-11-10 04:56 UTC |
Explore more
Most undervalued stocks (per our valuation) · Undervalued Industrials stocks · All valued stocks · Interactive IP valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.