Packaging Corp Q4 revenue, adjusted EPS miss estimates on lower production and sales volume in legacy packaging business

Overview

• Containerboard producer's Q4 revenue and adjusted EPS missed analyst expectations

• Company faced lower production and sales volume in legacy packaging business

• Company repurchased 760,000 shares during the quarter

Outlook

• Company expects first-quarter earnings of $2.20 per share excluding special items

• Packaging Corp anticipates higher domestic containerboard prices in Q1

• Company forecasts slightly lower Paper segment volume and prices in Q1

Result Drivers

• LOWER VOLUME - Co attributed lower Q4 earnings to decreased production and sales volume in legacy packaging and paper segments

• GREIF INTEGRATION - Losses from acquired Greif business due to outages at Massillon mill

• PRICING AND MIX - Higher prices and improved product mix in packaging and paper segments partially offset negative impacts

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the paper packaging peer group is "buy"

• Wall Street's median 12-month price target for Packaging Corp of America is $233.00, about 4.2% above its January 27 closing price of $223.62

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 19 three months ago

Press Release: ID:nBw44txSya

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