Packaging Corp. of America Reports Robust 2Q; Shares Remain Overvalued
Although shares in Packaging Corporation of America have traded off more than 5% following the release of second-quarter earnings, we believe shares still look expensive. By historical standards, the second quarter was strong, with sales up 12% over the prior year to $1.77 billion and an adjusted EBITDA margin of 21.6% thanks to rising containerboard prices. However, we believe the current stock price of $110.69 at the time of writing assumes a persistence of profitability that will not come to ...Packaging Corporation of America is a producer of containerboard products and a producer of uncoated freesheet paper. The company's segments include: Packaging, which produces a variety of corrugated packaging products, including shipping containers, multi-color boxes and displays, and honeycomb protective packaging, as well as produces packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products; Paper, which manufactures and sells papers, including both commodity and specialty papers; and Corporate and Other, which includes transportation assets, such as rail cars and trucks, to transport the company's products to and from its manufacturing sites.
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