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Lake Forest, Illinois-based Packaging Corporation of America (PKG) manufactures and sells containerboard and corrugated packaging products. Valued at a market cap of $20.3 billion, the company operates mills, corrugated products plants, and related facilities. It is expected to announce its fiscal Q4 earnings results before the market opens on Tuesday, Jan. 28.
Prior to this event, analysts expect the packaging company to report a profit of $2.51 per share, up 17.8% from $2.13 per share in the year-ago quarter. The company has a solid track record of consistently beating Wall Street's bottom-line estimates in the last four quarters. In Q3, PKG’s adjusted EPS of $2.65 outpaced the consensus estimates by a solid margin of 6.8%.
For fiscal 2024, analysts expect PKG to report an EPS of $9.08, up 4.4% from $8.70 in fiscal 2023. Furthermore, in fiscal 2025, EPS is expected to grow 24% year-over-year to $11.26.
Shares of PKG have rallied 35.4% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 27.2% rise and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 31.4% return over the same time frame.
On Oct. 22, shares of PKG rose 5.5% following its better-than-expected Q3 earnings release on Oct. 22. Robust growth in packaging segment sales led to a 12.6% year-over-year increase in the company’s revenue to $2.2 billion. The top-line figure outpaced the consensus estimates by 4.4%. Moreover, its adjusted earnings of $2.65 per share increased 29% from the year-ago quarter and outpaced the consensus estimates. Significant growth in gross profit and adjusted operating income fueled by lower freight and logistics costs aided its bottom-line figure.
Wall Street analysts are moderately optimistic about Packaging Corporation of America’s stock, with a "Moderate Buy" rating overall. Among eight analysts covering the stock, five recommend "Strong Buy," and three indicate “Hold.” The average analyst price target for PKG is $241.86, indicating a modest 6.5% potential upside from the current levels.
