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Packaging Corp. (PKG) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Packaging Corp. (PKG) closed at $157.28, marking a -1.64% move from the previous day. This change lagged the S&P 500's 0.63% loss on the day. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 0.15%.

Coming into today, shares of the maker of containerboard and corrugated packaging products had lost 0.11% in the past month. In that same time, the Industrial Products sector lost 0.1%, while the S&P 500 gained 0.89%.

Packaging Corp. will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.87, up 32.26% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.13 billion, up 13.42% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.66 per share and revenue of $8.64 billion. These totals would mark changes of +24.17% and +11.77%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Packaging Corp.Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Packaging Corp. is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Packaging Corp. is holding a Forward P/E ratio of 13.72. For comparison, its industry has an average Forward P/E of 13.1, which means Packaging Corp. is trading at a premium to the group.

Investors should also note that PKG has a PEG ratio of 2.74 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PKG's industry had an average PEG ratio of 1.57 as of yesterday's close.

The Containers - Paper and Packaging industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 27, which puts it in the top 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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