Packaging (PKG) AI Stock Analysis

• Market Cap: $20.02B
• Dividend Yield: 2.42%
• Average Volume (3M): 837.27K
• Price to Earnings (P/E): 25.9
• Beta (1Y): 0.69
• Revenue Growth: 7.23%
• EPS Growth: -3.88%
• Country: US
• Employees: 15,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 2.32
• Shares Outstanding: 89,977,066
• 10 Day Avg. Volume: 1,245,127
• 30 Day Avg. Volume: 837,272
• PEG Ratio: 4.72
• Price to Book (P/B): 4.55
• Price to Sales (P/S): 2.39
• P/FCF Ratio: 38.46
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 2.71
• Enterprise Value/Gross Profit: 12.42
• Enterprise Value/Ebitda: 13.13
• 1Y Price Target: $245.14
• Price Target Upside: 10.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 11.15
• Revenue Forecast (FY): $10.22B

• Rating: 76 Outperform
• Price Target: $251.00 ▲(12.78% Upside)

The overall stock score of 76 reflects strong financial performance and a positive earnings call, tempered by bearish technical indicators and challenges in export sales and operating costs. The company's strategic initiatives, including the Greif acquisition and mill reconfiguration, are expected to enhance long-term competitiveness and growth.

Positive Factors

Strong cash generation

Sustained free cash flow growth and an operating cash flow to net income ratio above 1 indicate durable cash conversion. This supports capital investments, debt servicing, acquisitions and shareholder returns without relying on external financing, enhancing financial resilience over cycles.

Robust profitability and margins

Healthy gross, EBITDA and net margins reflect operational efficiency and pricing power in corrugated and containerboard markets. Durable margin structure provides buffer against input cost shocks and funds reinvestment in capex and productivity initiatives, supporting long-term competitiveness.

Successful strategic acquisition integration

Greif integration has contributed to earnings and is cited as improving productivity and scale. A well-executed bolt-on acquisition that delivers synergies can lower unit costs, broaden customer mix and strengthen market position, yielding durable competitive benefits if execution continues.

Negative Factors

Declining export volumes

Sustained reductions in export containerboard volumes weaken geographic diversification and utilization. Lower export demand can depress plant throughput, reduce scale economics and force reliance on domestic markets, making revenue and margin recovery harder if international demand stays soft.

Persistent input cost inflation

Structural inflation in wood, energy, chemicals, labor and freight increases operating cost base. If pricing power or mix improvements lag inflation, margins will compress. Managing these persistent cost pressures requires sustained price realization and productivity gains to protect long-term profitability.

Wallula reconfiguration reduces capacity and incurs charges

Permanently removing capacity and taking large restructuring charges trims flexibility and near-term earnings. While intended to lower costs, the capacity loss reduces upside if demand rebounds, may affect customer continuity, and imposes execution risk during transition to realize projected savings.

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 corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multi-color boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging products, as well as packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. This segment sells its corrugated products through a direct sales and marketing organization, independent brokers, and distribution partners. The Paper segment manufactures and sells commodity and specialty papers, as well as communication papers, including cut-size office papers, and printing and converting papers. This segment sells white papers through its sales and marketing organization. Packaging Corporation of America was founded in 1867 and is headquartered in Lake Forest, Illinois.

How the Company Makes Money

Packaging generates revenue primarily through the sale of its packaging products to businesses across multiple sectors. The company operates on a B2B model, supplying packaging solutions to manufacturers and retailers who require specialized packaging for their goods. Key revenue streams include direct sales of packaging products, custom packaging design services, and long-term contracts with clients for ongoing supply. Additionally, PKG benefits from strategic partnerships with raw material suppliers and logistics companies, which help to streamline operations and reduce costs. The increasing demand for sustainable packaging solutions has also positioned PKG to capture market share, as more companies seek eco-friendly alternatives in response to consumer preferences and regulatory pressures.

Packaging Financial Statement Overview

Summary

Strong profitability and operating efficiency (gross margin 21.79%, net margin 10.18%, EBITDA margin 20.62%) and solid cash generation (FCF growth 15.94% TTM; operating cash flow to net income 1.30). Balance sheet leverage is moderate (debt-to-equity 0.92) with strong ROE (19.54%).

Income Statement

The company has shown consistent revenue growth with a TTM increase of 1.52% and strong profitability metrics, including a gross profit margin of 21.79% and a net profit margin of 10.18%. The EBIT and EBITDA margins are also healthy at 14.16% and 20.62%, respectively. These figures indicate robust operational efficiency and profitability in the competitive packaging industry.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.92, indicating moderate leverage. The return on equity is strong at 19.54%, showcasing effective use of equity to generate profits. However, the equity ratio of 43.31% suggests a balanced but slightly leveraged capital structure.

Cash Flow

The company's cash flow is strong, with a free cash flow growth rate of 15.94% TTM and a solid operating cash flow to net income ratio of 1.30. The free cash flow to net income ratio of 0.50 indicates a healthy conversion of earnings into cash, supporting future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.77B	8.38B	7.80B	8.48B	7.73B	6.66B
Gross Profit	1.91B	1.78B	1.70B	2.09B	1.87B	1.39B
EBITDA	1.81B	1.63B	1.59B	1.89B	1.68B	1.14B
Net Income	893.30M	805.10M	765.20M	1.03B	841.10M	461.00M
Balance Sheet
Total Assets	10.98B	8.83B	8.68B	8.00B	7.84B	7.43B
Cash, Cash Equivalents and Short-Term Investments	728.70M	787.00M	1.14B	405.20M	704.80M	1.08B
Total Debt	4.36B	2.77B	3.17B	2.79B	2.73B	2.74B
Total Liabilities	6.22B	4.43B	4.68B	4.34B	4.23B	4.19B
Stockholders Equity	4.76B	4.40B	4.00B	3.67B	3.61B	3.25B
Cash Flow
Free Cash Flow	725.10M	521.50M	845.40M	670.80M	489.00M	611.60M
Operating Cash Flow	1.44B	1.19B	1.32B	1.50B	1.09B	1.03B
Investing Cash Flow	-2.49B	-277.80M	-875.10M	-833.70M	-794.40M	-426.10M
Financing Cash Flow	1.01B	-876.40M	-112.00M	-960.00M	-655.60M	-311.60M

Packaging Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 222.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 222.55 is above the 20-day moving average (MA) of 218.01, above the 50-day MA of 207.73, and above the 200-day MA of 200.17, indicating a bullish trend. The MACD of 3.94 indicates Positive momentum. The RSI at 59.25 is Neutral, neither overbought nor oversold. The STOCH value of 29.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PKG.

Packaging Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKG	76 Outperform	$20.02B	25.93	―	2.42%	7.23%	-3.88%
AMCR	73 Outperform	$20.43B	25.86	7.44%	6.20%	28.41%	-35.50%
CCK	73 Outperform	$12.07B	12.95	34.10%	1.01%	2.94%	893.70%
SW	68 Neutral	$21.67B	29.16	4.11%	4.51%	―	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BALL	59 Neutral	$15.24B	21.28	11.74%	1.53%	2.87%	―
IP	49 Neutral	$21.29B	-6.01	-24.51%	4.69%	33.71%	-517.99%

Packaging Corporate Events

PCA Discusses Q3 2025 Performance and Future Plans

On December 10 and 11, 2025, PCA’s executives met with analysts and investors to discuss the company’s performance and future plans. PCA reported a 6% increase in net sales for Q3 2025 compared to the previous year, with a notable increase in EBITDA. The company is integrating the recently acquired Greif business, which has exceeded performance expectations, and is undergoing a reconfiguration of its Wallula mill to achieve significant cost savings. PCA continues to focus on strategic growth and capital investment, supported by strong cash flow and a disciplined capital structure.

The most recent analyst rating on (PKG) stock is a Buy with a $220.00 price target. To see the full list of analyst forecasts on Packaging stock, see the PKG Stock Forecast page.

Packaging Corporation Announces Wallula Mill Reconfiguration

On December 3, 2025, Packaging Corporation of America announced plans to permanently shut down the No. 2 paper machine and kraft pulping facilities at its Wallula, Washington containerboard mill, while continuing operations of the No. 3 paper machine and recycled pulping facilities. This reconfiguration, expected to be completed by the end of the first quarter of 2026, will result in a reduction of 250,000 tons of annual production capacity and a headcount reduction of approximately 200 positions. The company anticipates pre-tax restructuring charges of $205 million, with significant cost savings expected from improved production efficiency and a shift to lower-cost facilities. This strategic move aims to enhance PCA’s competitiveness amid rising costs, ensuring the mill’s future viability and supporting continued growth with customers.

The most recent analyst rating on (PKG) stock is a Buy with a $240.00 price target. To see the full list of analyst forecasts on Packaging stock, see the PKG Stock Forecast page.