International Paper a standout containerboard play: 5 big analyst picks

© Reuters.

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.

InvestingPro subscribers got this news first. Never miss another market-moving headline.

International Paper upped to buy at Truist

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

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.

Kimco raised to Equal Weight at Wells Fargo

Wells Fargo upgraded Kimco Realty (NYSE:KIM) to Equal Weight from Underweight on Wednesday with a price target of $20.00, as reported in real time on InvestingPro.

The analysts anticipate that Kimco's year-to-date share price underperformance will subside for several reasons.

First, the firm expects accelerated growth in AFFO per share in 2024 compared to 2023, driven by the accretive acquisition of RPT, as well as increased consensus estimates when the merger benefits are fully factored in. Second, the firm foresees occupancy gains in line with industry peers through 2024. Lastly, Wells Fargo (NYSE:WFC) noted that Kimco has a substantial level of liquidity available for investment.

Two more upgrades

Seaport Global Securities upgraded Enphase Energy (NASDAQ:ENPH) to Buy from Neutral with a price target of $185.00.

Deutsche Bank upgraded Five9 (NASDAQ:FIVN) to Buy from Hold and raised its price target to $80.00 from $75.00.

In fast-moving markets, every second counts - and InvestingPro subscribers are always one step ahead with lightning-quick updates.