Dublin, Ireland-based Smurfit Westrock Plc (SW) provides paper and packaging solutions for consumer and corrugated packaging markets. Valued at $27.5 billion by market cap, Smurfit operates as one of the largest integrated producers of containerboard and high-graphics preprinted linerboard.
The paper and packaging giant is expected to announce its fourth-quarter results on Thursday, Feb. 6. Ahead of the event, analysts expect Smurfit to report a non-GAAP profit of $0.71 per share, up a massive 255% from $0.20 per share reported in the year-ago quarter. The company has a mixed earnings surprise history. It surpassed Wall Street’s bottom-line estimates once over the past four quarters while missing on three other occasions. Its adjusted EPS for the last reported quarter declined 40.7% year-over-year to $0.48, missing analysts’ estimates by 32.4%.
For the full fiscal 2024, Smurfit is expected to deliver an adjusted EPS of $2.65, down 12.3% from $3.02 in fiscal 2023. While in fiscal 2025, its earnings are expected to rebound 21.9% year-over-year to $3.23 per share.
SW stock has gained 8.4% over the past six months, notably underperforming the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 18.8% surge while outpacing the S&P 500 Index’s ($SPX) 5.7% gains during the same time frame.
Despite missing Street’s earnings estimates, Smurfit Westrock’s stock prices soared nearly 12% after the release of its Q3 results on Oct. 30. Although the company’s topline was impacted due to lower pricing mix, the positive impact of acquisitions and a notable surge in corrugated volumes led to a staggering 163.2% year-over-year growth in revenues to $7.7 billion.
While the company incurred a net loss of $150 million during the quarter on a GAAP basis due to acquisition-related integration costs and higher SG&A expenses, its non-GAAP adjusted EBITDA surged nearly 141% year-over-year to $1.3 billion.
The consensus opinion on SW stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 13 analysts covering the stock, eight recommend “Strong Buy,” two advise “Moderate Buy,” and three suggest a “Hold” rating. Its mean price target of $61.58, indicates a 16.3% upside potential from current price levels.
