IP Shorts Hold Firm as Stock Surges Into Earnings

International Paper heads into its July 30 Q2 print riding a 15% one-month rally, with short sellers sitting on meaningful paper losses but refusing to cover.

The stock's surge is the standout setup detail here. IP closed at $42.16 on Thursday, up 11% in a single session and 12% on the week — a move that dragged it past the consensus mean price target of $42.73. That kind of compressed upside typically puts short sellers under pressure, yet short interest remains elevated at 10.4% of the free float, roughly 54.7 million shares, and has actually grown by 21% over the past month. Bears have been adding, not retreating, even as the stock has run against them. The borrow market tells a very different story from the price action: availability is extremely loose at 826%, meaning there are roughly eight shares available for every one currently lent out, and the cost to borrow is just 0.45%. There is no squeeze mechanics building in the lending market. Options positioning, however, leans defensive — the put/call ratio is running at 1.84, well above its 20-day average of 1.73. That's not extreme, but the PCR briefly touched its 52-week high of 2.20 on July 20, suggesting some traders were aggressively hedging into the recent pop before partially pulling back.

The analyst community has been revising higher at a notable pace ahead of the print. RBC Capital lifted its target to $48 on July 17, and Truist moved to $46 from $40 just days earlier. JPMorgan raised its target to $51 while staying Neutral — a meaningful upgrade in dollar terms even without a rating change. Citigroup, already at Buy, pushed its target to $43 from $36. The direction of travel is clear: the Street is chasing the stock higher, though the average target at roughly $43 barely clears the current price, which limits how much of a catalyst analyst upgrades alone can provide. The bull case rests on the continued integration of the DS Smith acquisition reshaping IP's European earnings mix and a recovery in containerboard demand. Bears counter that the valuation looks increasingly full — EV/EBITDA near 8.3x has compressed by roughly 0.34 turns over the past month as the stock has run — and that EPS momentum, while strong near-term, is built on a cost structure that remains under scrutiny. The ORTEX factor scores capture the tension: EPS momentum ranks in the 84th percentile over 30 days, but the short score rank places IP in just the 5th percentile, meaning the short interest profile looks more bearish than nearly all peers.