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International Paper Concludes Sylvamo Corporation Spin-Off; Shares Fall 4.9%
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International Paper Concludes Sylvamo Corporation Spin-Off; Shares Fall 4.9%

Shares of pulp and paper corporation International Paper Company (IP) declined 4.9% on Friday after the company announced the completion of its previously announced spin-off of Sylvamo Corporation. The company pared its losses marginally to close at $53.54 in extended trade.

Post the spin-off, each shareholder of International Paper received one share of Sylvamo common stock for every eleven shares of International Paper. Notably, International Paper continues to own about 19.9% of the outstanding shares of Sylvamo common stock.

The CEO of International Paper, Mark Sutton, said, “The spin-off enhances the strategic flexibility and focus for long-term success and value creation at both companies. International Paper is now a highly-advantaged, corrugated packaging-focused company, well-positioned to grow earnings and cash generation.” (See International Paper stock chart on TipRanks)

Recently, UBS analyst Cleveland Rueckert reiterated a Sell rating on the stock. The analyst, however, raised the price target to $52 from $47, which implies downside potential of 2.4% from current levels.

The analyst observes that even though 2021 has seen demand recover for the company’s products, additional capacity additions will lead to a decline in 2022 utilization rates to 93%, which is a concern for the company.

Consensus among analysts is a Hold based on 2 Buys, 1 Hold and 2 Sells. The average International Paper price target of $68.60 implies upside potential of 28.8% from current levels.

International Paper scores a 6 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained about 20.1% over the past year.

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