International Paper Stock: A Promising Investment Opportunity

International Paper Stock: A Promising Investment Opportunity

One analyst thinks this stock is a buy with or without a buyout proposal. Investors have sent shares of International Paper (NYSE: IP) higher in recent weeks on reports that the company has attracted the attention of a buyer. At least one Wall Street analyst sees reason to give the stock a look regardless of the merger and acquisition talk.

There's more than just a possible merger here

International Paper is a global leader in the paper and packaging industry, a sector that has been rocked by consolidation in recent years. The company has not sat on the sidelines and is looking to buy British paper supplier DS Smith. It is also reportedly a potential target for Brazil's Suzano.

• Jefferies analyst Philip Ng sees a lot of ways for International Paper to win. The analyst upgraded the stock to buy from hold and boosted his price target to $57 from $38. Ng says he sees "multiple levers" to unlock shareholder value, including new CEO Andrew Silvernail's focus on value instead of volumes in sales, as well as increasing scale in Europe and refinements to the company's portfolio.

Is International Paper stock a buy?

Shares of International Paper are up 26% in just the last month, but as Ng notes, even with those gains the stock is still down slightly compared to where it traded in 2014. It is usually unwise to follow momentum traders into a potential buyout target, especially in a political climate that is hostile to foreign bidders for U.S. manufacturing titans. But Ng is offering a rosy outlook regardless of whether Suzano or someone else comes calling.