Packaging (PKG) AI Stock Analysis

• Market Cap: $19.43B
• Dividend Yield: 2.32%
• Average Volume (3M): 775.29K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.67
• Revenue Growth: 8.98%
• EPS Growth: 25.81%
• Country: US
• Employees: 15,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 2.48
• Shares Outstanding: 89,978,780
• 10 Day Avg. Volume: 619,675
• 30 Day Avg. Volume: 775,289
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.18
• Enterprise Value/Gross Profit: 9.85
• Enterprise Value/Ebitda: 10.51
• 1Y Price Target: $228.29
• Price Target Upside: 5.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 77 Outperform
• Price Target: $247.00 ▲(14.38% Upside)

The overall stock score of 77 reflects strong financial performance and positive earnings call sentiment as the most significant factors. Technical analysis indicates bullish momentum, though valuation suggests potential overvaluation. Strategic acquisitions bolster growth prospects despite some operational challenges.

Positive Factors

Strategic Acquisition

The acquisition of Greif's containerboard business is expected to enhance PKG's growth and integration capabilities, strengthening its market position and operational scale.

Strong Financial Health

PKG's solid financial health, characterized by revenue growth and robust cash flow, supports its long-term operational and strategic initiatives, ensuring financial flexibility.

Revenue Growth

Consistent revenue growth indicates PKG's ability to expand its market reach and product adoption, supporting its competitive position in the packaging industry.

Negative Factors

Higher Operating Costs

Rising operating and outage costs could pressure PKG's margins, potentially affecting profitability and requiring cost management strategies.

Export Sales Decline

Declining export sales, exacerbated by global trade tensions, may limit PKG's international growth prospects and revenue diversification.

Rising Debt Levels

Increased debt to finance acquisitions could strain PKG's balance sheet, impacting financial flexibility and increasing interest obligations.

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

PKG generates revenue through multiple streams, primarily by selling its packaging products to a diverse range of industries. Key revenue streams include the sale of custom packaging solutions, stock packaging items, and specialty products tailored to specific client requirements. The company also benefits from long-term contracts with major clients, ensuring a steady income flow. Additionally, PKG engages in strategic partnerships with suppliers and manufacturers to optimize its supply chain and reduce costs, further enhancing profitability. The growing demand for sustainable packaging solutions in response to environmental concerns has also contributed to increased sales, positioning PKG favorably in the market.

Packaging Financial Statement Overview

Summary

The company exhibits strong financial health with consistent revenue and profit growth, efficient operational management, and a stable balance sheet. The cash flow metrics further reinforce the company's ability to generate and manage cash effectively.

Income Statement

The company demonstrates strong revenue growth with a TTM increase of 1.12%, supported by a solid gross profit margin of 22.13% and a net profit margin of 10.43%. EBIT and EBITDA margins are healthy at 14.56% and 20.90% respectively, indicating efficient operational management. The consistent revenue growth and robust profitability metrics suggest a well-managed income statement.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.62, reflecting a balanced approach to leveraging. Return on equity is strong at 20.84%, indicating effective use of equity to generate profits. The equity ratio stands at 51.23%, suggesting a stable financial structure. Overall, the balance sheet reflects a solid financial position with manageable leverage.

Cash Flow

The cash flow statement reveals a positive free cash flow growth rate of 18.34% TTM, indicating improved cash generation. The operating cash flow to net income ratio of 1.26 and free cash flow to net income ratio of 0.42 suggest efficient cash conversion. The company maintains strong cash flow metrics, supporting its operational and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.64B	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	1.79B	1.63B	1.59B	1.89B	1.68B	1.14B
Net Income	904.50M	805.10M	765.20M	1.03B	841.10M	461.00M
Balance Sheet
Total Assets	9.04B	8.83B	8.68B	8.00B	7.84B	7.43B
Cash, Cash Equivalents and Short-Term Investments	880.30M	787.00M	1.14B	405.20M	704.80M	1.08B
Total Debt	2.81B	2.77B	3.17B	2.79B	2.73B	2.74B
Total Liabilities	4.41B	4.43B	4.68B	4.34B	4.23B	4.19B
Stockholders Equity	4.63B	4.40B	4.00B	3.67B	3.61B	3.25B
Cash Flow
Free Cash Flow	625.40M	521.50M	845.40M	670.80M	489.00M	611.60M
Operating Cash Flow	1.29B	1.19B	1.32B	1.50B	1.09B	1.03B
Investing Cash Flow	-241.00M	-277.80M	-875.10M	-833.70M	-794.40M	-426.10M
Financing Cash Flow	-875.90M	-876.40M	-112.00M	-960.00M	-655.60M	-311.60M

Packaging Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 215.95
• 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 215.95 is above the 20-day moving average (MA) of 213.92, above the 50-day MA of 205.61, and above the 200-day MA of 202.51, indicating a bullish trend. The MACD of 2.32 indicates Positive momentum. The RSI at 58.76 is Neutral, neither overbought nor oversold. The STOCH value of 61.15 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	77 Outperform	$19.43B	21.27	20.51%	2.32%	8.98%	25.81%
CCK	75 Outperform	11.30B	19.92	19.23%	1.06%	2.07%	32.37%
BALL	68 Neutral	13.47B	22.63	68.37%	1.62%	-3.12%	―
AMCR	63 Neutral	18.58B	24.90	4.36%	6.34%	10.03%	-28.33%
SW	63 Neutral	21.93B	63.95	―	3.79%	―	―
IP	57 Neutral	23.93B	-463.39	6.82%	4.08%	18.13%	-106.71%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Packaging Corporate Events

Packaging Corporation Completes Acquisition of Greif’s Business

On August 31, 2025, Packaging Corporation of America (PCA) completed the acquisition of Greif’s containerboard business for approximately $1.8 billion. This strategic acquisition, funded through a combination of cash and new borrowings, expands PCA’s production capacity significantly with the addition of two containerboard mills and eight plants across the U.S., potentially enhancing its market position and operational capabilities.

Packaging Corp Announces $500M Senior Notes Offering

On August 11, 2025, Packaging Corporation of America priced a $500 million offering of 5.200% Senior Notes due 2035, with the issuance expected to close on August 15, 2025. The proceeds, estimated at $495.1 million after expenses, will be used to finance the acquisition of Greif, Inc.’s containerboard business. This strategic move aims to enhance the company’s market position, although the acquisition must be completed by June 30, 2026, or the notes will be subject to redemption.

Packaging Corporation Secures $1.6 Billion Credit Agreements

On July 31, 2025, Packaging Corporation of America (PCA) entered into two significant credit agreements, the Commercial Credit Agreement and the Farm Credit Agreement, totaling $1.6 billion. These agreements, which include unsecured term loan facilities and a revolving credit facility, are intended to support the company’s acquisition of Greif and replace an older credit agreement. The new credit arrangements are expected to enhance PCA’s financial flexibility and operational capabilities, with loans guaranteed by PCA’s material subsidiaries and subject to customary covenants.

Packaging Corp Acquires Greif’s Containerboard Business

On June 30, 2025, Packaging Corporation of America entered into a definitive agreement to acquire the containerboard business of Greif, Inc. for $1.8 billion in cash. This acquisition, expected to close in the third quarter of 2025, is subject to customary conditions and regulatory approvals, and includes provisions for termination rights and indemnification, potentially impacting PCA’s market positioning and operational capabilities.

Packaging Corporation Acquires Greif’s Containerboard Business

On July 1, 2025, Packaging Corporation of America announced its agreement to acquire the containerboard business of Greif, Inc. for $1.8 billion in cash. The acquisition, expected to close by the end of PCA’s third quarter, includes two containerboard mills and eight sheet feeder and corrugated plants across the U.S., which generated $1.2 billion in sales over the last 12 months. The deal is anticipated to bring $60 million in pre-tax synergies through operational efficiencies and increased integration, enhancing PCA’s growth strategy and shareholder value. The acquisition will be financed with $1.5 billion in new debt and cash, and is expected to be immediately accretive to earnings, with PCA’s pro forma leverage ratio estimated at 1.7X post-transaction.