International Paper a standout containerboard play: 5 big analyst picks
Investing.com | Author Davit Kirakosyan
Published Sep 21, 2023 06:32AM ET
Investing.com -- Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Western Digital, Kimco, Enphase Energy, and Five9.
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International Paper upped to buy at Truist/h2
International Paper (NYSE:IP) was upgraded to Buy from Hold at Truist Securities on Thursday with a price target of $43 - up $13 from the prior one.
The analysts wrote that they believe "the containerboard market is reaching a positive inflection point and poised for recovery due to improving demand from the end of destocking and increasingly balanced inventories."
"While we acknowledge that new containerboard supply continues to be slowly absorbed into the market," the analysts continued, "persistent economic downtime and increasing demand should serve as offsets and pricing should continue to be stable."
They also said IP is their "preferred stock to play this recovery" among it and rivals WestRock (NYSE:WRK) and Packaging Corp (NYSE:PKG), as it "has greater operating leverage and more upside to our price target than WRK and PKG."
IP shares were up 1.4% to $34.19 in the premarket.
Western Digital stock gains following the upgrade/h2
Western Digital (NASDAQ:WDC) shares rose nearly 4% on Wednesday after Exane BNP Paribas upgraded the company to Outperform from Neutral and raised its price target to $58.00 from $36.00, noting it believes the current NAND cycle and nearline HDD demand troughed in Q2/23.
The firm anticipated that NAND average selling prices (ASPs) reached their lowest year-over-year point in June, with a 60% year-over-year decline. Their analysis suggests a strong connection between the stock's performance and year-over-year changes in NAND ASPs and gross margins. The firm expects these metrics to start improving in Q4.
In terms of HDD, Exane's research highlighted a robust connection between year-over-year growth in nearline drives and anticipates improvements in server CPU sales during the second half of the year.
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