International Paper Stock: Buy or Sell in September?

Parkev analyzes International Paper's current financial struggles, noting that management has tripled its estimate for macroeconomic headwinds to $150 million. These challenges include rising transportation costs, higher corrugated container costs, and increased employee health expenses. Despite these pressures, Parkev highlights management's plan to raise prices and Parkev notes Parkev's own expectation for stronger profitability in the second half of the year based on management forecasts.

Parkev observes that International Paper's historical performance has been volatile, with operating margins and returns on invested capital trending downward. Parkev points out that the operating profit margin was a mere 0.9% recently, and returns on invested capital were negative. Parkev also notes that while the forward P/E of 11.4 is lower than the S&P 500 average, Parkev would personally prefer a valuation in the mid-single digits given the business's current state.