KeyBanc Remains a Sell on Packaging Corp (PKG)

KeyBanc analyst Adam Josephson reiterated a Sell rating on Packaging Corp (PKG) today and set a price target of $89. The company’s shares opened today at $102.02.

Josephson noted:

“We are reducing our 2019 adj. EPS estimate from $7.92 to $7.66 (consensus was $7.98) and our 2020 estimate from $7.24 to $6.95 (consensus was $7.50). On our downwardly revised estimates, PKG is trading at ~8.5x our 2020 EBITDA estimate, above the 5-yr. average of 8.0x and 10-yr. average of 7.5x; given deteriorating industry fundamentals, we don’t think a higher than average multiple is warranted. And it’s not as if our 2020 estimates imply below-average margins: our 2020 adj. EBITDA margin assumption is 20%, exactly in line with the average from 2012-2018. In other words, we don’t consider our 2020 EBITDA estimate trough by any stretch, such that we don’t think a close-to- peak multiple should be applied to it.”

According to, Josephson is a 4-star analyst with an average return of 7.9% and a 65.0% success rate. Josephson covers the Consumer Goods sector, focusing on stocks such as International Paper Co, Avery Dennison Corp, and Graphic Packaging.

Currently, the analyst consensus on Packaging Corp is a Hold with an average price target of $98.33.

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Packaging Corp’s market cap is currently $9.66B and has a P/E ratio of 12.36. The company has a Price to Book ratio of 3.46.

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Packaging Corp. of America engages in the production of container products. It operates through the following segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers a variety of corrugated packaging products, such as conventional shipping containers.

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