BofA double upgraded LP Building Solutions (LPX) to Buy from Underperform with a $112 price target and upgraded Karat Packaging (KRT) to Buy from Neutral with a price target of $31, while downgrading Sonoco (SON) and Graphic Packaging (GPK) to Neutral with price targets of $56 and $24, respectively. Packaging and paper/forest stocks have come under renewed pressure, as the stocks have declined 15% relative to the market since June 30, notes the analyst, who sees a “mixed” Q3 ahead for the group. Karat looks more attractive on its pullback, while LP should see strong siding trends as it gains share, the analyst contends. On the flip side, the firm moved both Graphic and Sonoco to Neutral as it sees a continuation of sluggish fundamentals and estimate reductions and don’t yet see an inflection.
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