Citi Says Buy International Paper

Citi Investment Research is out with a research report on the pulp sector and says to buy International Paper Company IP. It has a $36 price target on shares. In a note to clients, Citi Investment Research writes, "Demand decline in uncoated freesheet - North American demand for one of IP's key products, uncoated freesheet, has declined at a ~4% CAGR rate over the past 10 years. While the industry has matched supply to demand, an acceleration of this demand decline could cause IP to miss earnings estimates. IP has entered into a $3.4B hostile bid to acquire Temple-Inland (TIN). If IP were to overpay for TIN or have difficulty successfully realizing synergies from an acquisition it could negatively impact company earnings." Shares of IP gained 36 cents yesterday to close at $29.99, a gain of 1.2%.