Smurfit Westrock Faces Stock Decline Amid Mixed Q4 Results
Dublin, Ireland-based Smurfit Westrock Plc (SW) stands as a prominent player in sustainable packaging solutions. The company emerged from the merger of Smurfit Kappa and WestRock, boasting a market capitalization of $23.8 billion. SW serves various industries with innovative and environmentally friendly packaging products that align with the evolving needs of businesses globally.
Being categorized as a “large-cap stock,” SW holds significant weight in the packaging and materials sector, underscoring its substantial market presence and influence. The company continues to lead in sustainability and innovation, establishing standards for environmentally responsible practices while providing value to its customers and stakeholders.
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Despite its strong foundation, SW’s stock has faced challenges, dropping 17.4% from its peak of $56.99 reached on November 22, 2024. Over the past three months, the stock has fallen 12.2%, lagging behind the Dow Jones Industrial Average, which experienced a slight dip of just 39 basis points during that time.
From a year-to-date perspective, SW is down 12.6%, in contrast to the Dow’s minimal decline of 75 basis points. Additionally, its six-month performance shows a drop of 1.6%, while the Dow rose by 7 basis points.
SW has mostly traded below its 20-day and 50-day moving averages since late February, confirming the recent downturn.
The company’s stock price saw a decline of 5.1% following the release of mixed Q4 results on February 12. Although net sales surged from $2.9 billion in the previous year’s quarter to $7.5 billion in Q4, this growth did not meet Wall Street expectations. On a positive note, adjusted EBITDA skyrocketed by 160.9% year-over-year, reaching $1.2 billion, and adjusted EPS rose from 19 cents to 34 cents. However, EPS fell short of consensus estimates by 50%. Following the initial drop, SW’s stock rebounded by 7.3% in the next trading session.
In comparison, while Smurfit Westrock underperformed its competitor, Packaging Corporation of America (PKG), which recorded a 10.6% decline year-to-date, it outpaced PKG’s 5.4% decline over the last six months.
Despite recent trends, analysts hold a positive outlook for SW. Among the 14 analysts covering the stock, the consensus rating is a “Strong Buy.” The average price target of $60.92 indicates a potential upside of 29.5% from current pricing.
On the date of publication, Aditya Sarawgi had no positions in any of the securities mentioned in this article. All information and data presented are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
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