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Dundee Downgrades Packaging Corporation of America to ‘Neutral’

Gabriel Kane

Yesterday’s Consumer Pops and Drops: UA, SON, PCAR, and PKG

(Continued from Prior Part)

Price movement

Packaging Corporation of America (PKG) has a market cap of $5.8 billion. PKG fell by 0.20% to close at $60.06 per share on April 11, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.65%, 11.6%, and -3.8%, respectively, as of the same day. This means that PKG is trading 2.9% above its 20-day moving average, 13.9% above its 50-day moving average, and 1.7% below its 200-day moving average.

Related ETF and peers

The iShares Global Timber & Forestry ETF (WOOD) invests 3.8% of its holdings in PKG. The ETF tracks the 25 largest publicly listed companies that own or manage forests and timberlands. The YTD price movement of WOOD was -5.5% as of April 8, 2016.

The market caps of PKG’s competitors are as follows:

  • International Paper (IP) — $16.3 billion
  • WestRock (WRK) — $9.4 billion
  • Domtar (UFS) — $2.5 billion

Dundee downgraded Packaging Corporation of America

Dundee has downgraded Packaging Corporation of America’s rating to “neutral” from “buy.”

Performance of Packaging Corporation of America in 4Q15

Packaging Corporation of America reported fiscal 4Q15 net sales of $1.39 billion, a fall of 3.0% compared to net sales of $1.43 billion in fiscal 4Q14. Its net income and EPS (earnings per share) rose to $104.3 million and $1.07, respectively, in fiscal 4Q15. This compares to $98.5 million and $1, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, PKG reported net sales of $5.7 billion, a fall of 1.9% year-over-year. Its net income and EPS rose to $436.8 million and $4.47, respectively, in fiscal 2015. This compares to $392.6 million and $3.99, respectively, in fiscal 2014.

PKG’s cash balance was $184.2 million in fiscal 2015, a rise of 47.5% YoY.

For ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

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