Dublin, Ireland-based Smurfit Westrock Plc (SW) is a global leader in sustainable packaging solutions, formed through the merger of Smurfit Kappa and WestRock. With a market cap of $23.8 billion, SW operates across diverse industries, offering innovative and eco-friendly packaging products that cater to the evolving needs of businesses worldwide.
Companies worth $10 billion or more are generally described as "large-cap stocks," and SW fits firmly into this category, reflecting its significant presence and influence in the packaging and materials industry. The company continues to drive sustainability and innovation, setting benchmarks for environmentally responsible practices and delivering value to its customers and stakeholders.
Despite its strengths, SW stock has plunged 17.4% from its all-time high of $56.99 touched on Nov. 22, 2024. Meanwhile, SW has dropped 12.2% over the past three months, significantly underperforming the Dow Jones Industrial Average’s ($DOWI) marginal 39 bps dip during the same time frame.
On a YTD basis, SW is down 12.6% compared to Dow’s marginal 75 bps dip. Furthermore, over the past six months, SW has dropped 1.6%, lagging behind Dow’s 7 bps uptick.
To confirm the recent downturn, SW has traded mostly below its 20-day and 50-day moving averages since late February.
Smurfit Westrock’s stock prices dropped 5.1% after the release of its mixed Q4 results on Feb. 12. Driven by growth from acquisition and volumes, the company’s net sales increased from $2.9 billion in the year-ago quarter to $7.5 billion in Q4. However, the figure fell short of Street expectations. Meanwhile, its adjusted EBITDA skyrocketed 160.9% year-over-year to $1.2 billion and its adjusted EPS increased to 34 cents, up from 19 cents in the year-ago quarter. However, its EPS also fell short of expectations and missed the consensus estimates by 50%. Following the initial dip, SW stock soared 7.3% in the following trading session.
While Smurfit Westrock underperformed its peer Packaging Corporation of America’s (PKG) 10.6% decline on a YTD basis, it has outperformed PKG’s 5.4% decline over the past six months.
Nevertheless, analysts remain optimistic about the stock’s prospects. Among the 14 analysts covering the SW stock, the consensus rating is a “Strong Buy.” Its mean price target of $60.92 suggests a 29.5% upside potential from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
