Packaging Corporation Of America (PKG)
NYSE:PKG
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Packaging
(NYSE:PKG)
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Rating:69Neutral
Price Target:
$239.00
â–²(12.00% Upside)
Action:Downgraded
Date:05/14/26
The score is driven mainly by solid financial performance (profitability and cash generation) and a constructive earnings outlook with improving operational momentum and integration progress, partially offset by higher leverage and near-term cost/outage headwinds. Technicals are broadly neutral, and valuation is the main restraint due to the higher P/E despite a moderate dividend yield.
Positive Factors
Strong operating cash generation
Sustained operating cash flow (~$1.55B TTM) and positive free cash conversion provide durable funding for capex, dividends and buybacks. This cash-generation capacity supports strategic projects and integration spending while buffering cyclical volume or pricing swings over the next 2–6 months.
Negative Factors
Higher leverage versus prior years
A meaningful step-up in leverage reduces financial flexibility and increases exposure to interest-cost or refinancing risk. With debt roughly in line with equity, elevated leverage constrains discretionary returns and makes the company more sensitive to earnings variability over the coming months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong operating cash generation
Sustained operating cash flow (~$1.55B TTM) and positive free cash conversion provide durable funding for capex, dividends and buybacks. This cash-generation capacity supports strategic projects and integration spending while buffering cyclical volume or pricing swings over the next 2–6 months.
Read all positive factors
Packaging Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales across different business units, revealing which segments contribute most to growth and where there might be challenges or opportunities.
Breaks down sales across different business units, revealing which segments contribute most to growth and where there might be challenges or opportunities.
Data provided by:
The Fly
The FlyPackaging (PKG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.90B
Dividend Yield2.42%
Average Volume (3M)1.01M
Price to Earnings (P/E)27.5
Beta (1Y)0.67
Revenue Growth7.86%
EPS Growth-13.88%
CountryUS
Employees15,400
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)8.25
Shares Outstanding89,098,650
10 Day Avg. Volume745,853
30 Day Avg. Volume1,007,819
Financial Highlights & Ratios
PEG Ratio-6.02
Price to Book (P/B)4.04
Price to Sales (P/S)2.07
P/FCF Ratio25.49
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue2.47
Enterprise Value/Gross Profit12.05
Enterprise Value/Ebitda12.37
Forecast
1Y Price Target
$239.20Price Target Upside12.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.31
Revenue Forecast (FY)$9.94B
Packaging Business Overview & Revenue Model
Company Description
Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products in the United States. The company operates through Packaging and Paper segments. The Packaging segment offers various containerboard and corru...
How the Company Makes Money
Packaging Corporation of America generates its revenue primarily through the sale of containerboard and corrugated packaging materials. The company manufactures these products at its extensive network of mills and converts raw materials into finis...
Packaging Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 27, 2026
Earnings Call Sentiment Positive
The call presented clear operational momentum: higher sales, EBITDA growth, full-capacity runs, production records, inventory reductions and tangible early synergy/productivity gains from the Greif acquisition. Those positives are partially offset by meaningful near-term headwinds — special items and restructuring charges, a Q1 loss from Greif tied to weather and seasonality, materially higher freight/recycled fiber/chemical costs, elevated outage expense timing in Q2, and higher share-based compensation trimming seasonality. Management expects price realization to accelerate later in the year (with the largest benefit in Q3) and reiterated guidance for continued integration and capital projects that should drive longer-term benefits. Overall, the positives around revenue, margins, cash generation, integration progress and operational execution outweigh the near-term cost and timing challenges.Positive Updates
Revenue and Adjusted Earnings Growth
First quarter 2026 net sales were $2.4 billion (vs. $2.1 billion in Q1 2025). Excluding special items, Q1 2026 net income was $215 million ($2.40 per share) versus $208 million ($2.31) in Q1 2025; company EBITDA excluding special items was $486 million vs. $421 million a year ago.
Negative Updates
Special Items and Restructuring Charges
Q1 net income included special items expense of $0.49 per share primarily for Wallula Mill restructuring, Greif acquisition/integration costs, and corrugated facility closures, reducing GAAP earnings in the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Adjusted Earnings Growth
First quarter 2026 net sales were $2.4 billion (vs. $2.1 billion in Q1 2025). Excluding special items, Q1 2026 net income was $215 million ($2.40 per share) versus $208 million ($2.31) in Q1 2025; company EBITDA excluding special items was $486 million vs. $421 million a year ago.
Read all positive updates
Company Guidance
PCA guided second-quarter EPS of $2.33 excluding special items and said Packaging demand should remain strong with corrugated volume up (one more shipping day) and packaging mill production slightly higher; Q1 results were net income $171M ($1.91)/$215M ($2.40) excluding special items on $2.4B sales and total company EBITDA excl. special items of $486M, with Packaging EBITDA excl. special items $482M on $2.2B sales (22% margin) and Paper EBITDA $38M on $160M sales (23.6% margin). Operational metrics: 1,398,000 tons of containerboard produced in Q1 (legacy 1,210,000 tons, down 25k QoQ and 40k YoY), system inventories down 39k tons and Greif plant inventories reduced ~10k tons. Cash flow and capital: Q1 cash from ops $329M, CapEx $165M, free cash flow $164M; dividends $112M and $59M of buybacks (266k shares at $228.78 avg) with $224M repurchase authorization remaining; FY CapEx guidance $840–$870M and DD&A guidance $700M. Cost and tax guidance: Q1 effective tax ~<23% (expect ~26% in Q2; FY book ~25%), outage expense was $0.14 in Q1 and is expected to be $0.36 (Q2), $0.31 (Q3) and $0.64 (Q4) for a $1.44 full‑year outage impact, freight/fiber/chemicals are expected to be ~ $0.15 higher Q1→Q2, stock‑comp expense ~$17M higher in 2026 (evenly split Q2–Q4), DD&A excl. special items ~ $0.03 higher Q1→Q2, and PCA expects Greif to be accretive in Q2 (~$0.10 sequential EPS improvement) with $15–20M of mill productivity run‑rate gains already and a targeted $30M run rate by year‑end; price increases (reported containerboard +$50/ton YTD) should begin benefiting results in May with the majority of benefit in Q3.Packaging Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.22B | 8.99B | 8.38B | 7.80B | 8.48B | 7.73B |
| Gross Profit | 1.89B | 1.89B | 1.78B | 1.70B | 2.09B | 1.87B |
| EBITDA | 1.84B | 1.76B | 1.63B | 1.59B | 1.89B | 1.68B |
| Net Income | 740.40M | 768.90M | 805.10M | 765.20M | 1.03B | 841.10M |
Balance Sheet | ||||||
| Total Assets | 10.78B | 10.92B | 8.83B | 8.68B | 8.00B | 7.84B |
| Cash, Cash Equivalents and Short-Term Investments | 543.70M | 600.80M | 787.00M | 1.14B | 405.20M | 704.80M |
| Total Debt | 4.37B | 4.36B | 2.77B | 3.17B | 2.79B | 2.73B |
| Total Liabilities | 6.19B | 6.33B | 4.43B | 4.68B | 4.34B | 4.23B |
| Stockholders Equity | 4.59B | 4.60B | 4.40B | 4.00B | 3.67B | 3.61B |
Cash Flow | ||||||
| Free Cash Flow | 702.20M | 728.60M | 521.50M | 845.40M | 670.80M | 489.00M |
| Operating Cash Flow | 1.55B | 1.56B | 1.19B | 1.32B | 1.50B | 1.09B |
| Investing Cash Flow | -2.69B | -2.57B | -277.80M | -875.10M | -833.70M | -794.40M |
| Financing Cash Flow | 787.30M | 859.40M | -876.40M | -112.00M | -960.00M | -655.60M |
Packaging Technical Analysis
Positive
213.39
Price Trends
220.51
Negative
214.52
Negative
208.46
Positive
Market Momentum
-2.29
Negative
52.00
Neutral
61.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PKG, the sentiment is Positive. The current price of 213.39 is above the 20-day moving average (MA) of 209.17, below the 50-day MA of 220.51, and above the 200-day MA of 208.46, indicating a neutral trend. The MACD of -2.29 indicates Negative momentum. The RSI at 52.00 is Neutral, neither overbought nor oversold. The STOCH value of 61.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PKG.
Packaging Risk Analysis
Packaging disclosed 19 risk factors in its most recent earnings report. Packaging reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Acquisition Integration – The business may underperform relative to our expectations, and we may not be able to successfully integrate the business into our existing business. Q4, 2025
Packaging Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $18.90B | 27.46 | 15.95% | 2.42% | 7.86% | -13.88% | |
63 Neutral | $14.70B | 19.16 | 17.29% | 1.53% | 14.00% | 82.84% | |
63 Neutral | $10.74B | 16.04 | 24.33% | 1.01% | 7.06% | 35.16% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $16.96B | 18.21 | 5.80% | 6.20% | 64.83% | -48.00% | |
55 Neutral | $19.60B | 90.06 | 2.08% | 4.21% | 20.90% | -40.94% | |
46 Neutral | $16.02B | 81.14 | -20.44% | 4.69% | 25.45% | -625.24% |
* Consumer Cyclical Sector Average
PKG
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Packaging Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Packaging Corporation Shareholders Reaffirm Board, Pay and Auditor
Positive
May 13, 2026
On May 12, 2026, Packaging Corporation of America held its 2026 Annual Meeting of Stockholders, where shareholders re-elected the company’s slate of director nominees, with most candidates receiving strong majority support despite a few draw...
Executive/Board Changes
Packaging Corp announces leadership changes and board transition
Neutral
Mar 3, 2026
On February 25, 2026, Packaging Corporation of America director Paul T. Stecko notified the board that he would retire and not stand for reelection at the 2026 Annual Meeting, with the board size to be reduced from ten to nine members, and the com...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.