PKG
Packaging Corporation of America$232.55
Unclear
Target $210.29
Report: Mar 07, 2026Consumer Cyclical • Packaging & Containers • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$232.55-9.6%
Rec: UnclearConviction: Medium
Entry Target
$161.76
(30% below current)
Fair Value
$210.29
(10% below current)
Stop Loss
$125.65
(46% below current)
Position Size
Starter
Time Horizon
Transitional
Key Metrics
Live Snapshot
Market Data
52 Week High$249.51
52 Week Low$172.72
Avg. 3 Month Volume1.07M
Efficiency
LTM Gross Margin21.0%
LTM EBITDA Margin19.6%
LTM EBIT Margin12.3%
LTM Operating Margin12.3%
LTM ROA7.8%
LTM ROE16.8%
LTM ROIC10.7%
LTM ROCE12.7%
Capital Structure
Market Cap (MM)$18.9B
Enterprise Value (MM)$22.8B
Shares Outstanding89.21M
Total Debt (MM)$4.36B
Cash & Equivalents (MM)$529.00M
LTM Net Debt (MM)$3.84B
LTM Net Debt/EBITDA2.2x
Growth
TTM Rev. Growth7.2%
Last 3-Yr Rev. CAGR2.0%
Last 3-Yr EBITDA CAGR-2.4%
Last 3-Yr EPS CAGR-8.1%
Valuation
Street Target Price$246.00
LTM EV/Revenue2.5x
LTM EV/Gross Profit12.1x
LTM EV/EBIT20.6x
LTM EV/EBITDA12.9x
LTM P/E24.5x
LTM EV/FCF31.3x
LTM P/FCF26.0x
LTM P/TB2.2x
LTM P/B4.1x
Dividend Yield2.4%
Payout Ratio58.1%
Executive SummarySituation: Current price is $232.55 versus fair value $210.29 (-9.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Implementation of $70/ton price increase. Bear case centers on Moat erosion via destructive pricing. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Successful implementation of the $70 per ton price hike in March 2026 will drive immediate margin expansion; rapid capture of $60 million in Greif synergies will validate the M&A strategy; energy independence projects will lower the long-term cost curve.
Bear Case
Elevated leverage of 2.2x net debt/EBITDA limits future buyback capacity; negative 2.0% incremental ROIC indicates value destruction in recent capital deployments; antitrust litigation and WARN Act investigations create significant legal overhang.
Key Catalysts
Near-Term (0-6 months)Impact: High
Implementation of $70/ton price increase. This addresses market concerns regarding margin compression by demonstrating the company's ability...
Mid-Term (6-18 months)Impact: Moderate
Realization of $60 million in Greif synergies. Validating the M&A strategy will shift sentiment from 'integration risk' to 'growth platform....
Long-Term (18+ months)Impact: Moderate
PKG is relevant for analysis now due to the recent closing of the transformative Greif acquisition and the imminent implementation of a majo...
Primary Risks
Concern: Low
Moat erosion via destructive pricing. If competitors abandon pricing discipline to gain share in a soft macro environment, PKG's structural...
Concern: Medium
Leverage and interest rate exposure. The 57% increase in debt to $4.36 billion, with 25% at variable rates, makes the company vulnerable to...
Concern: Medium
Stewardship is adequate but currently misaligned. The board possesses deep industry expertise, notably Audit Chair Cheryl Beebe (former CFO...
Recent Activity
2025-07-01SEC Filing (8-K)
+7.59%Packaging Corporation of America announces $1.8 billion acquisition of Greif's containerboard business
2025-01-29SEC Filing (8-K)
-9.77%Packaging Corporation of America reports Q4 2024 and full year 2024 results
2024-10-23SEC Filing (8-K)
+5.53%Packaging Corporation of America reports Q3 2024 earnings of $2.64 per share
2023-07-25SEC Filing (8-K)
+10.08%Packaging Corporation of America reports Q2 2023 earnings of $2.24 per share
2023-04-25SEC Filing (8-K)
-7.27%Packaging Corporation of America reports Q1 2023 earnings of $2.11 per share
Valuation Table
9.8/10Decision Grade
Scenario Range
$70
Base
$100
Bull
$233