Mercer International (MERC) is a "less risky" and "more attractive opportunity" for International Paper (IP) than Smurfit Kappa (SMFTF), CIBC analyst Hamir Patel tells investors in a research note on Mercer titled "The More Logical Acquisition Candidate For IP?" Following recent deals to consolidate the hardwood pulp market, the analyst thinks deals on softwood side are likely to "heat up" next. By acquiring Mercer, International Paper would effectively control 24% of the global 15MM mtpy northern bleached softwood kraft market, Patel contends. He keeps an Outperformer rating on Mercer shares with a $20 price target. The stock in morning trading is up 40c to $13.95.

Wells Fargo lowered the firm's price target on International Paper (IP) to $37 from $42 and keeps an Equal Weight rating on the shares. While improving containerboard fundamentals are positive for International Paper, Wells believes the DS Smith (DITHF) merger remains an overhang, the analyst tells investors in a research note. In addition, the firm says it remains unclear how long or what level of return is associated with increased spend across the company's Industrial Packaging operations.

Reports Q1 revenue $4.62B, consensus $4.56B. "International Paper made progress executing our strategic initiatives in the first quarter,'' said Mark Sutton, chairman and CEO. "We saw commercial benefits from our business strategies, as well as cost benefits from mill system optimization. Although costs remain elevated and volumes were seasonally lower in the quarter, market trends continue to improve."