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Shares of Packaging Corporation of America (PKG - Free Report) scaled a 52-week high of $130.19 on Jan 8, eventually closing lower at $129.58. The gain is driven by its solid performance in third-quarter 2017, encouraging outlook and the Sacramento Container acquisition.
The company has a market cap of $12 billion. Over the last three months, its average volume of shares traded is approximately 721K. Also, Packaging Corporation surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive earnings surprise of 2.64%.
Price Performance
Notably, the stock has gained 47.3% in a year’s time, higher than the S&P 500’s gain of 21.3%. Packaging Corporation has also outperformed the industry’s gain of 16.8% during the same time frame with respect to price performance.
What Led to the 52-Week High?
Packaging Corporation’s earnings and sales improved year over year in the third quarter, thus fueling the share price appreciation. The company projects packaging segment demand to remain strong in fourth-quarter 2017 compared to the prior quarter. Further, the implementation of price increases will aid margin performance in the next quarter.
Packaging Corporation of America Price and Consensus
Packaging Corporation also believes production in 2017 will benefit from improvements on both DeRidder mill No. 1 and mill No. 3. Its other mills also continue to benefit from the continued attention on improving the efficiencies. Thus, the company estimates production to be up probably 150,000 tons in 2017 over 2016.
Notably, Packaging Corporation has been active on the acquisition front for the last few years. It bought corrugated-products producer Tim-Bar Corporation for $386 million in August 2016 and acquired corrugated manufacturer Columbus Container for $100 million later that November.
Further, its acquisition of Sacramento Container will boost the company’s operations both geographically and strategically. Notably, Packaging Corporation’s shares have gained more than 10% since it acquired all assets of Sacramento Container for $265 million on Oct 2, 2017. The company expects that the contribution from this acquisition will drive fourth-quarter performance.
The above-mentioned tailwinds raised investors’ optimism on the stock and are anticipated to boost the company’s share price in the days ahead.
Zacks Rank & Stocks to Consider
Packaging Corporation currently carries a Zacks Rank #3 (Hold).
Deere has a long-term earnings growth rate of 8.2%. Its shares have rallied 25.7%, over the past six months.
Graphic Packaging has a long-term earnings growth rate of 5%. The company’s shares have been up 17% during the same time frame.
Sonoco has a long-term earnings growth rate of 4.7%. Shares of the company have increased 6% during the same time period.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Packaging Corporation Hits 52-Week High: What's Driving It?
Shares of Packaging Corporation of America (PKG - Free Report) scaled a 52-week high of $130.19 on Jan 8, eventually closing lower at $129.58. The gain is driven by its solid performance in third-quarter 2017, encouraging outlook and the Sacramento Container acquisition.
The company has a market cap of $12 billion. Over the last three months, its average volume of shares traded is approximately 721K. Also, Packaging Corporation surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive earnings surprise of 2.64%.
Price Performance
Notably, the stock has gained 47.3% in a year’s time, higher than the S&P 500’s gain of 21.3%. Packaging Corporation has also outperformed the industry’s gain of 16.8% during the same time frame with respect to price performance.
What Led to the 52-Week High?
Packaging Corporation’s earnings and sales improved year over year in the third quarter, thus fueling the share price appreciation. The company projects packaging segment demand to remain strong in fourth-quarter 2017 compared to the prior quarter. Further, the implementation of price increases will aid margin performance in the next quarter.
Packaging Corporation of America Price and Consensus
Packaging Corporation of America Price and Consensus | Packaging Corporation of America Quote
Packaging Corporation also believes production in 2017 will benefit from improvements on both DeRidder mill No. 1 and mill No. 3. Its other mills also continue to benefit from the continued attention on improving the efficiencies. Thus, the company estimates production to be up probably 150,000 tons in 2017 over 2016.
Notably, Packaging Corporation has been active on the acquisition front for the last few years. It bought corrugated-products producer Tim-Bar Corporation for $386 million in August 2016 and acquired corrugated manufacturer Columbus Container for $100 million later that November.
Further, its acquisition of Sacramento Container will boost the company’s operations both geographically and strategically. Notably, Packaging Corporation’s shares have gained more than 10% since it acquired all assets of Sacramento Container for $265 million on Oct 2, 2017. The company expects that the contribution from this acquisition will drive fourth-quarter performance.
The above-mentioned tailwinds raised investors’ optimism on the stock and are anticipated to boost the company’s share price in the days ahead.
Zacks Rank & Stocks to Consider
Packaging Corporation currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector include Deere & Company (DE - Free Report) , Graphic Packaging Holding Company (GPK - Free Report) and Sonoco Products Company (SON - Free Report) . While Deere sports a Zacks Rank #1 (Strong Buy), Graphic Packaging and Sonoco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has a long-term earnings growth rate of 8.2%. Its shares have rallied 25.7%, over the past six months.
Graphic Packaging has a long-term earnings growth rate of 5%. The company’s shares have been up 17% during the same time frame.
Sonoco has a long-term earnings growth rate of 4.7%. Shares of the company have increased 6% during the same time period.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>