Packaging Corporation of America Set to Announce Q1 Results

Valued at $16.5 billion by market capitalization, Packaging Corporation of America (PKG) is a prominent U.S. manufacturer of containerboard and corrugated packaging. Based in Lake Forest, Illinois, the company operates through its Packaging and Paper segments, producing essential products such as shipping containers and protective packaging for various industries, including food, beverages, and industrial goods.

On Tuesday, April 22, after the markets close, PKG is expected to release its first-quarter results. Analysts anticipate that the company will report adjusted earnings of $2.22 per share, reflecting a significant 29.1% increase from the $1.72 per share posted in the same quarter last year. Despite missing bottom-line estimates once in the past four quarters, PKG has exceeded expectations on three occasions.

Future Earnings Projections

Looking ahead to fiscal 2025, analysts predict that PKG’s earnings will jump to $10.62 per share, marking an impressive 17.7% increase from the $9.04 per share reported in fiscal 2024. Furthermore, projections indicate that earnings will continue to grow by 11.3% year-over-year, reaching $11.84 per share in fiscal 2026.

Stock Performance Overview

Over the past year, Packaging Corporation’s stock has seen a 2.3% decline, underperforming compared to the Consumer Discretionary Select Sector SPDR Fund (XLY) which gained 2.8%, and the S&P 500 Index ($SPX) which fell 1.4% during the same timeframe.

On January 28, after releasing mixed Q4 results, PKG’s stock plummeted 9.8%. Although the company reported a 10.7% year-over-year increase in net sales, surpassing $2.1 billion, investor confidence wavered due to a failure to fully convert these earnings into substantial operational gains. The company attributed this to rising selling, general, and administrative (SG&A) expenses, which tempered the improvements in EBITDA margin. Non-GAAP EBITDA grew by 11.6% year-over-year to $439.3 million, but its non-GAAP EPS of $2.47 fell short of consensus estimates by 1.6%.

Analyst Ratings and Price Targets

Despite the recent fluctuations in performance, Packaging Corporation of America’s financial standing remains robust, bolstered by a consensus rating of “Strong Buy” among analysts. Of the eight analysts monitoring PKG, six recommend “Strong Buy,” while two suggest a “Hold.” The average price target is $244.12, indicating a potential upside of 33.1% from current levels.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data contained herein are for informational purposes only. Please review the Barchart Disclosure Policy here.

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