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Founded in 1867 and headquartered in Lake Forest, Illinois, Packaging Corporation of America (PKG) is a leading producer of containerboard and corrugated packaging solutions with a market cap of $19.1 billion. The company specializes in manufacturing sustainable packaging for a wide range of industries, including retail, food and beverage, and e-commerce.
Shares of this packaging company have outperformed the broader market over the past 52 weeks. PKG has rallied 21.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17%. However, on a YTD basis, the stock is down 5.6%, compared to SPX’s 1.3% gains.
Zooming in further, PKG outperformed compared to the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 19.4% gain over the past 52 weeks.
PKG shares dipped slightly following its Q4 earnings release on Jan. 28. The company reported a 10.7% year-over-year revenue increase to $2.15 billion, exceeding analyst expectations of $2.13 billion. However, GAAP EPS of $2.45 missed estimates by 3.3%, while adjusted EBITDA of $439.3 million came in just below the projected $445.9 million, reflecting a 20.5% margin. Additionally, its Q1 2025 GAAP EPS guidance of $2.21 at the midpoint fell 5.2% short of analyst forecasts.
For the current fiscal year, ending in December, analysts expect PKG’s EPS to grow 15.5% year over year to $10.44. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
PKG stock has a consensus “Strong Buy” rating, an upgrade from the “Moderate Buy” rating one month back. Among the eight analysts in coverage, six suggest a “Strong Buy,” and two analysts recommend a “Hold.”
On Feb. 13, Seaport Research analyst Mark Weintraub upgraded Packaging Corporation to “Buy,” setting a price target of $250, which indicates a 16.9% upside potential from the current levels.
PKG’s mean price target of $248.50 represents a premium of 16.9% to current price levels. The street-high target of $266 indicates a potential upside of 25.1%.
On the date of publication, Rashmi Kumari 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.
