International Paper reports Q1 2026 results today against a backdrop of steadily unwinding short positions and a rare burst of options optimism — a meaningful shift from where positioning stood just weeks ago.
The short-selling story has been moving in one clear direction. At 8.1% of the free float, short interest is meaningful but falling fast — down 7% over the past month and off a further 3% this week to roughly 42.7 million shares. The lending market reflects that retreat: cost to borrow has inched up to 0.51% this week, still extremely cheap, and availability is wide open relative to the 52-week tightest levels. Borrow conditions carry no hint of a squeeze. What the data describes instead is a one-way unwind — shorts that built positions in March, when SI was approaching 8.8% of float, have been reducing steadily as the stock sold off.
Options positioning has flipped sharply bullish, and that is the more interesting signal heading into the print. The put/call ratio dropped to 1.08 on Tuesday — nearly three standard deviations below its 20-day average of 1.20 and the lowest defensive reading of the past year. For most of March and early April, the PCR was running above 1.20 and touched 1.52 at its most defensive. That was the peak of tariff-driven fear in packaging. The drop to 1.08 marks a clear pivot: options traders are pulling back hedges ahead of the earnings call, not adding them.
The analyst community has been trimming targets but not conviction. Truist and Citigroup both lowered targets in mid-April — to $44 from $48 and $47 respectively — while maintaining Buy ratings. UBS held at Neutral with a $40 target, and Deutsche Bank initiated at Hold with $38. The Street consensus remains at Buy with a mean target of $42.70, implying roughly 27% upside to the current price of $33.58. The EV/EBITDA multiple has drifted to 7.4x, down from above 8x a month ago, and the P/E has compressed to 17.2x — both moves consistent with a stock that has fallen 5% over the past month without a corresponding earnings-estimate collapse. Factor scores flag weak EPS momentum — ranking in just the 28th percentile on 30-day momentum and 20th percentile on 90-day — and the EPS surprise score is at the 1st percentile, suggesting the market has been repeatedly disappointed by actual results versus forecasts.
The institutional ownership picture adds texture. Capital Research and Management holds an outsized 23.7% stake and added nearly 14.9 million shares in the latest reported quarter ending March 31. Franklin Resources added 6.8 million shares, and BlackRock added 3.2 million. That level of institutional accumulation at Q1 prices — when IP was trading meaningfully higher — does not yet show any sign of reversal in the March data, though whether those holders still held through April's weakness will not be known until the next filings. On the insider side, CFO Lance Loeffler sold a token 2,703 shares at $35.70 in early April alongside routine award-related sales by other executives, all low-significance disposals. A director, Per Anders Gustafsson, bought roughly $1 million worth of stock in mid-March across two transactions at prices around $38 — the highest-significance insider activity in the recent window, and a purchase made closer to the stock's earlier trading range.
The last earnings report in late January produced a 1-day decline of 2.8%, followed by a 6.9% recovery over the subsequent five trading sessions. That template — an initial sell-the-news drop offset by a short-covering bounce — is worth holding in mind as IP reports today. With short interest still at 8.1% of float and declining, the structure for a similar post-print recovery remains in place. What to watch is whether the quarter's revenue and packaging-volume data gives the bulls, who have clearly been adding call exposure this week, enough to sustain that optimism beyond the first session.
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