Strength Seen in Packaging Corp. (PKG): Can Its 3.8% Jump Turn into More Strength?
Packaging Corp. (PKG) shares soared 3.8% in the last trading session to close at $168.01. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.4% gain over the past four weeks.
Packaging Corporation’s shares got a boost after an analyst at Wells Fargo raised the target price on the stock from $147 to $173. The analyst maintains an Equal-Weight recommendation for the company.
The revised target price implies a 7% potential upside from Packaging Corporations’ closing price of $161.85 on Nov 29, 2023.
This maker of containerboard and corrugated packaging products is expected to post quarterly earnings of $1.79 per share in its upcoming report, which represents a year-over-year change of -23.8%. Revenues are expected to be $1.89 billion, down 4.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Packaging Corp., the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PKG going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Packaging Corp. is a member of the Zacks Containers - Paper and Packaging industry. One other stock in the same industry, Greif (GEF), finished the last trading session 1.8% higher at $69.90. GEF has returned 8.4% over the past month.
For Greif , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.30. This represents a change of -29% from what the company reported a year ago. Greif currently has a Zacks Rank of #3 (Hold).
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