At 46.75 dollars for IP then the Smds share is worth 475 plus dividend
Still a big discount to 458 of today |
Market arbitrage starting to kick in.
The valuation gap will close to 1 to 2% now |
The gap will close between now and end September
The transcript of the IP call yesterday was very positive to read. And clearly very well received by the market |
Current share price seems to reflect confidence that all doubts of the merger with International Paper have gone following IP statements yesterday. I would suggest the share price of DS Smith should now more accurately reflect the movement of the share price of IP. |
Quite a big beat of consensus of 42 cent per share. |
 SECOND QUARTER 2024 HIGHLIGHTS
Second quarter net earnings of $498 million ($1.41 per diluted share); includes a tax benefit of $338 million ($0.96 per diluted share) related to internal legal entity restructuring
Second quarter adjusted operating earnings (non-GAAP) of $193 million ($0.55 per diluted share)
Second quarter cash provided by operations of $365 million and returned $160 million to shareholders in dividends
"Reflecting on my first 90 days, I am confident in our teams' ability to unlock substantial value at IP," said Andy Silvernail, Chief Executive Officer. "While our second quarter financial results increased sequentially on better price and seasonally higher volumes, we expect near-term performance to be challenged. In order to accelerate improvement, we are deploying an 80/20 business process. We will make the changes needed to focus our portfolio, become excellent with our customers and optimize our cost to deliver profitable growth. In North America, our investments will center on providing customers with the most reliable and innovative packaging solutions. We also look forward to the combination with DS Smith and together creating significant value for our shareholders." |
This is just maintaining a 20-25p discount now to the IP value...
Tomorrow's quarter results for IP will dictate the move of things in the short term.
My guess is 75% likely sell off based on selling on news after strong rises but also 25% chance of the new CEO surprising with corporate activity news... If they can flip the pulp business to Suzano or their like then this jumps on a rerating.. |
We're already approaching the 450p level that was being touted as a probable best share price for this takeover a month or so ago. I've never been a fan of the SMDS management and whilst quadrupling my money in Smurfit Kappa - this share has only been good for income and offsetting gains in other stocks. IMO the value that we shareholders should be enjoying is still locked away somewhere in the group. Despite its patchy performance of late, I think that IP can unlock some of that value for us and hence I am happy to sit and hold. |
Glad to see Moorsie that we share our approach as a firm hold for I have for some time greatly respected your opinion. I am also in for the long term. |
Ygor I agree
The US paper and packaging cycle is in our favour and for that reason I am very happy to hold knowing that the share price in 2025 will be highly likely higher than this level...
Add in the smds dividend and no one is getting my shares |
IP share price still a bit bloated by the recent attempted takeover so you may be correct Moorsie. Evertheless, on a one year view things don't look too bad to me. |
Next weeks IP results could see the air come out of our tyres... The usual buy on speculation and sell on news could apply here |
There is an interesting article on the new SWR thread (Smurfit Kappa in old money) talking about the recovery in the Board cycle and expectations for the SWR share price with the benefit of a US listing. All relevant stuff here. |
Michael Roxland's forecast is somewhat ambitious but if his figure of 55 dollars has any merit and is reached it would equate to a 545 valuation of DS Smith. |
International Paper (NYSE:IP - Free Report) had its price target lifted by Truist Financial from $52.00 to $55.00 in a report published on Tuesday morning, Benzinga reports. They currently have a buy rating on the basic materials company's stock. |
Does anyone know why International Paper shares have risen by 3% today. That have continued to rise after the London market closed? |
Hello All has anyone thought about the 12p dividend that's due to go XD in Sept - usually I'd expect the price to drop by the same amount but given the takeover situation then I'm not sure - anyone got any thoughts? |
Was ref to post 4782 an answer to my question about holding IP ?
Btw I imagine others apart from me have the live IP price showing |
439 now the fair value. |
See post 4782. |
Anyone else still in two minds about holding IP ?
In theory a more secure dividend as more diversified, plus possible uptrend in the packaging market, plus cost-savings. Where are the downsides ? Apart from a bit of extra admin. |
For the sake of few more pence in the short term I wouldn't bother to hold.
For the long run it may be a good deal though. |
I would suggest that 432 would more accurately reflect the ongoing situation with IP at present. |
Thank you PJ. Hate to be an old age mentioner but now that I am 29years and 640 months old the brain and other parts do not work quite as well as was once the case. |
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