We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Paper and Related Products Stocks to Watch Amid Industry Challenges
Read MoreHide Full Article
The Zacks Paper and Related Products industry has been grappling with subdued demand due to lower consumer spending amid inflation and declining graphic paper demand due to the shift toward digitalization. Elevated costs have added to the woes. However, increasing packaging requirements due to the rise in e-commerce activities and steady demand from consumer-oriented end markets, such as food and beverages, and healthcare, are expected to support the industry. Increasing environmental awareness is boosting the appeal of paper as a sustainable and eco-friendly packaging alternative, serving as a major growth driver.
The Zacks Paper and Related Products industry comprises companies that manufacture and sell paper and paper products. The industry is highly diversified in terms of products, ranging from graphic paper and packaging paper to absorbent hygiene products. Graphic papers, which include printing and writing papers, and newsprint, are utilized for communication purposes. The industry provides packaging solutions for liquid, food, pharmaceutical, beauty, household, commercial and industrial products. It also produces fluff and specialty pulps utilized in absorbent hygiene products, tissues and paper products. The industry caters to a wide array of industries, including food and beverage, farming, home and personal care, health, retail, e-commerce, and transport. The industry players meet customers’ shipping, storage and display requirements with sustainable solutions.
Major Trends Shaping the Future of the Paper and Related Products Industry
Persistent Demand Challenges, Cost Inflation & Tariff Risks: The continued shift toward digital communication remains a structural headwind for graphic paper demand, due to reduced print advertising, electronic billing, email adoption and lower reliance on physical catalogs. In response, industry participants are reshaping their portfolios toward packaging, tissue and specialty paper products with more resilient demand characteristics. At the same time, the industry continues to face elevated input costs across transportation, chemicals and fuel, further amplified by geopolitical tensions and broader energy market volatility. Consequently, companies are emphasizing disciplined pricing, cost-reduction initiatives, operational streamlining and automation to protect profitability and improve manufacturing efficiency.
E-commerce and Consumer-Driven Packaging Growth: Despite near-term demand pressures, the industry's exposure to essential end markets, including food, beverages, healthcare and consumer staples, provides a relatively stable foundation for growth. The continued expansion of e-commerce represents another important long-term demand driver for corrugated boxes, containerboard and other protective packaging solutions. Growing Internet penetration, widespread smartphone adoption and the convenience of online shopping continue to support e-commerce activity. Improvements in digital payments, logistics, fulfillment infrastructure and personalized shopping experiences are further strengthening online retail adoption. As products move through increasingly complex distribution networks, demand for durable, lightweight and efficient packaging that protects goods during transit is expected to remain strong. This creates significant growth opportunities for paper and packaging producers.
Sustainability and Circular Packaging Drive Product Innovation: Sustainability is becoming an increasingly important force shaping the Paper and Related Products industry. Consumers, brand owners and regulators are placing greater emphasis on reducing plastic waste, improving recyclability and lowering the environmental footprint of packaging. This trend is accelerating demand for paper as a renewable and recyclable packaging alternative.
Automation, Digitalization and Operational Efficiency Gain Importance: Technology adoption is also reshaping the industry's operating model. Companies are increasingly deploying automation, Artificial Intelligence, advanced analytics and digital monitoring tools to improve productivity, reduce downtime and optimize production processes. These technologies can help companies better manage energy consumption, predict equipment failures and improve product quality. Automation is particularly important as producers seek to offset persistent labor and operating-cost pressures. Going forward, companies with efficient production networks, advanced technology capabilities and disciplined capital spending are likely to be better positioned to navigate cyclical market conditions and protect margins.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Paper and Related Products industry is an 11-stock group within the broader Basic Materials sector. The industry currently carries a Zacks Industry Rank #211, which places it in the bottom 15% of the 248 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bleak prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Before we present a few Paper and Related Products stocks that investors can consider, it is worth looking at the industry’s stock-market performance and valuation picture.
Industry Versus Broader Market
The Paper and Related Products industry has underperformed the sector and the S&P 500 over the past year. The stocks in this industry have collectively declined 7.8%, while the Basic Materials sector has moved up 30.6%. The S&P 500 composite has gained 21.3% during this time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA ratio, a commonly-used multiple for valuing Paper and Related Products companies, we see that the industry is currently trading at 8.51X compared with the S&P 500’s 17.83X and the Basic Material sector’s trailing 12-month EV/EBITDA of 13.95X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry has traded as high as 11.56X and as low as 5.10X, with the median being 8.19X.
3 Paper and Related Products Stocks to Watch
Clearwater Paper: The company continues to pursue growth opportunities to expand its product portfolio through both internal investments and external initiatives. Recently, Clearwater launched Circa paperboard, a new line of coated recycled board (CRB) for folding carton and carrier applications in the United States, developed through a collaboration with Greenpaper. This represents a strategic expansion of CLW’s portfolio with a high-performance recycled option designed to deliver dependable converting performance, reliable supply and strong value for everyday packaging applications. It also complements CLW’s premium solid bleached sulfate (SBS) portfolio. Meanwhile, Clearwater Paper is seeing early signs of improvement in SBS market conditions, supported by volume growth, lower imports and higher operating rates. The company remains focused on reducing costs, improving operational execution and implementing price hikes, which are expected to support its financial performance. It also continues to invest in its assets and operations to enhance efficiency, strengthen its competitive position and boost long-term growth. CLW shares have gained 39.5% in the past six months.
The Zacks Consensus Estimate for 2026 earnings for the Spokane, Washington-based company has remained unchanged in the past 60 days. The company currently carries a Zacks Rank #2 (Buy).
Klabin: The company delivered an EBITDA margin of 38% in the second quarter of 2026, reflecting its operational resilience, favorable pricing and volume trends, and disciplined cost management. Performance also benefited from the strategic allocation of volumes toward higher-margin markets and ongoing efficiency initiatives, which helped mitigate inflationary cost pressures. In the pulp business, sales volumes totaled 386,000 metric tons, remaining broadly stable year over year. The segment benefited from improving pricing trends for long-fiber and fluff pulp, supported by steady demand from the personal hygiene, baby care and adult care markets. Meanwhile, paper sales volumes increased 4% to 359,000 metric tons, primarily driven by higher coated board sales. Packaging sales totaled 273,000 metric tons, broadly in line with the prior-year quarter, reflecting a challenging comparison base and the segment's continued solid commercial performance. KLBAY also strengthened its financial position, reducing its debt-to-adjusted EBITDA ratio to 3.2x, down 0.7x over the past 12 months. Additionally, it announced a share repurchase program, highlighting confidence in its financial strength and prospects. The company's shares have declined 9.2% over the past six months.
The Zacks Consensus Estimate for the São Paulo, Brazil-based company’s 2026 earnings has moved up 19% over the past 60 days to 25 cents per share. The company has a trailing four-quarter earnings surprise of 22.2%, on average. Klabin has a long-term estimated earnings growth of 15.6% and currently has a Zacks Rank #3 (Hold).
Price: KLBAY
Mondi Plc: The company is optimizing its converting plant network and strengthening operational excellence to improve productivity, returns and scalability for future growth. Mondi benefits from a cost-advantaged manufacturing base, including some of Europe’s most productive and lowest-cost pulp and paper mills, and is focused on further enhancing asset reliability, productivity, energy efficiency and cost competitiveness. Cost discipline remains a key priority as the company manages inflationary pressures and maintains tight control over its fixed cost base. In the first half of 2026, the company also rolled out its Mondi Management System across its mill network and began extending it to converting operations to drive systematic productivity improvements. With major expansion projects largely completed, Mondi is shifting its focus toward commercial execution and maximizing returns from its asset base. Recent investments have added approximately 300,000 tons of new production capacity this year. Its integrated, cost-advantaged production platform and broad portfolio of recyclable packaging solutions position the company to gain market share and capitalize on growth opportunities in sustainable packaging markets. The company's shares have gained 2.1% over the past six months.
The Zacks Consensus Estimate for the Weybridge, United Kingdom-based company for 2026 earnings has moved up 44% over the past 60 days. MONDY currently carries a Zacks Rank of 3 and has a long-term estimated earnings growth of 16.6%.
View the Zacks #1 Rank List
Image: Bigstock
3 Paper and Related Products Stocks to Watch Amid Industry Challenges
The Zacks Paper and Related Products industry has been grappling with subdued demand due to lower consumer spending amid inflation and declining graphic paper demand due to the shift toward digitalization. Elevated costs have added to the woes. However, increasing packaging requirements due to the rise in e-commerce activities and steady demand from consumer-oriented end markets, such as food and beverages, and healthcare, are expected to support the industry. Increasing environmental awareness is boosting the appeal of paper as a sustainable and eco-friendly packaging alternative, serving as a major growth driver.
Companies like Clearwater Paper (CLW - Free Report) , Mondi plc (MONDY - Free Report) and Klabin (KLBAY - Free Report) are likely to gain from the above mentioned trends.
Industry Description
The Zacks Paper and Related Products industry comprises companies that manufacture and sell paper and paper products. The industry is highly diversified in terms of products, ranging from graphic paper and packaging paper to absorbent hygiene products. Graphic papers, which include printing and writing papers, and newsprint, are utilized for communication purposes. The industry provides packaging solutions for liquid, food, pharmaceutical, beauty, household, commercial and industrial products. It also produces fluff and specialty pulps utilized in absorbent hygiene products, tissues and paper products. The industry caters to a wide array of industries, including food and beverage, farming, home and personal care, health, retail, e-commerce, and transport. The industry players meet customers’ shipping, storage and display requirements with sustainable solutions.
Major Trends Shaping the Future of the Paper and Related Products Industry
Persistent Demand Challenges, Cost Inflation & Tariff Risks: The continued shift toward digital communication remains a structural headwind for graphic paper demand, due to reduced print advertising, electronic billing, email adoption and lower reliance on physical catalogs. In response, industry participants are reshaping their portfolios toward packaging, tissue and specialty paper products with more resilient demand characteristics. At the same time, the industry continues to face elevated input costs across transportation, chemicals and fuel, further amplified by geopolitical tensions and broader energy market volatility. Consequently, companies are emphasizing disciplined pricing, cost-reduction initiatives, operational streamlining and automation to protect profitability and improve manufacturing efficiency.
E-commerce and Consumer-Driven Packaging Growth: Despite near-term demand pressures, the industry's exposure to essential end markets, including food, beverages, healthcare and consumer staples, provides a relatively stable foundation for growth. The continued expansion of e-commerce represents another important long-term demand driver for corrugated boxes, containerboard and other protective packaging solutions. Growing Internet penetration, widespread smartphone adoption and the convenience of online shopping continue to support e-commerce activity. Improvements in digital payments, logistics, fulfillment infrastructure and personalized shopping experiences are further strengthening online retail adoption. As products move through increasingly complex distribution networks, demand for durable, lightweight and efficient packaging that protects goods during transit is expected to remain strong. This creates significant growth opportunities for paper and packaging producers.
Sustainability and Circular Packaging Drive Product Innovation: Sustainability is becoming an increasingly important force shaping the Paper and Related Products industry. Consumers, brand owners and regulators are placing greater emphasis on reducing plastic waste, improving recyclability and lowering the environmental footprint of packaging. This trend is accelerating demand for paper as a renewable and recyclable packaging alternative.
Automation, Digitalization and Operational Efficiency Gain Importance: Technology adoption is also reshaping the industry's operating model. Companies are increasingly deploying automation, Artificial Intelligence, advanced analytics and digital monitoring tools to improve productivity, reduce downtime and optimize production processes. These technologies can help companies better manage energy consumption, predict equipment failures and improve product quality. Automation is particularly important as producers seek to offset persistent labor and operating-cost pressures. Going forward, companies with efficient production networks, advanced technology capabilities and disciplined capital spending are likely to be better positioned to navigate cyclical market conditions and protect margins.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Paper and Related Products industry is an 11-stock group within the broader Basic Materials sector. The industry currently carries a Zacks Industry Rank #211, which places it in the bottom 15% of the 248 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bleak prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Before we present a few Paper and Related Products stocks that investors can consider, it is worth looking at the industry’s stock-market performance and valuation picture.
Industry Versus Broader Market
The Paper and Related Products industry has underperformed the sector and the S&P 500 over the past year. The stocks in this industry have collectively declined 7.8%, while the Basic Materials sector has moved up 30.6%. The S&P 500 composite has gained 21.3% during this time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA ratio, a commonly-used multiple for valuing Paper and Related Products companies, we see that the industry is currently trading at 8.51X compared with the S&P 500’s 17.83X and the Basic Material sector’s trailing 12-month EV/EBITDA of 13.95X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry has traded as high as 11.56X and as low as 5.10X, with the median being 8.19X.
3 Paper and Related Products Stocks to Watch
Clearwater Paper: The company continues to pursue growth opportunities to expand its product portfolio through both internal investments and external initiatives. Recently, Clearwater launched Circa paperboard, a new line of coated recycled board (CRB) for folding carton and carrier applications in the United States, developed through a collaboration with Greenpaper. This represents a strategic expansion of CLW’s portfolio with a high-performance recycled option designed to deliver dependable converting performance, reliable supply and strong value for everyday packaging applications. It also complements CLW’s premium solid bleached sulfate (SBS) portfolio. Meanwhile, Clearwater Paper is seeing early signs of improvement in SBS market conditions, supported by volume growth, lower imports and higher operating rates. The company remains focused on reducing costs, improving operational execution and implementing price hikes, which are expected to support its financial performance. It also continues to invest in its assets and operations to enhance efficiency, strengthen its competitive position and boost long-term growth. CLW shares have gained 39.5% in the past six months.
The Zacks Consensus Estimate for 2026 earnings for the Spokane, Washington-based company has remained unchanged in the past 60 days. The company currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price: CLW
Klabin: The company delivered an EBITDA margin of 38% in the second quarter of 2026, reflecting its operational resilience, favorable pricing and volume trends, and disciplined cost management. Performance also benefited from the strategic allocation of volumes toward higher-margin markets and ongoing efficiency initiatives, which helped mitigate inflationary cost pressures. In the pulp business, sales volumes totaled 386,000 metric tons, remaining broadly stable year over year. The segment benefited from improving pricing trends for long-fiber and fluff pulp, supported by steady demand from the personal hygiene, baby care and adult care markets. Meanwhile, paper sales volumes increased 4% to 359,000 metric tons, primarily driven by higher coated board sales. Packaging sales totaled 273,000 metric tons, broadly in line with the prior-year quarter, reflecting a challenging comparison base and the segment's continued solid commercial performance. KLBAY also strengthened its financial position, reducing its debt-to-adjusted EBITDA ratio to 3.2x, down 0.7x over the past 12 months. Additionally, it announced a share repurchase program, highlighting confidence in its financial strength and prospects. The company's shares have declined 9.2% over the past six months.
The Zacks Consensus Estimate for the São Paulo, Brazil-based company’s 2026 earnings has moved up 19% over the past 60 days to 25 cents per share. The company has a trailing four-quarter earnings surprise of 22.2%, on average. Klabin has a long-term estimated earnings growth of 15.6% and currently has a Zacks Rank #3 (Hold).
Price: KLBAY
Mondi Plc: The company is optimizing its converting plant network and strengthening operational excellence to improve productivity, returns and scalability for future growth. Mondi benefits from a cost-advantaged manufacturing base, including some of Europe’s most productive and lowest-cost pulp and paper mills, and is focused on further enhancing asset reliability, productivity, energy efficiency and cost competitiveness. Cost discipline remains a key priority as the company manages inflationary pressures and maintains tight control over its fixed cost base. In the first half of 2026, the company also rolled out its Mondi Management System across its mill network and began extending it to converting operations to drive systematic productivity improvements. With major expansion projects largely completed, Mondi is shifting its focus toward commercial execution and maximizing returns from its asset base. Recent investments have added approximately 300,000 tons of new production capacity this year. Its integrated, cost-advantaged production platform and broad portfolio of recyclable packaging solutions position the company to gain market share and capitalize on growth opportunities in sustainable packaging markets. The company's shares have gained 2.1% over the past six months.
The Zacks Consensus Estimate for the Weybridge, United Kingdom-based company for 2026 earnings has moved up 44% over the past 60 days. MONDY currently carries a Zacks Rank of 3 and has a long-term estimated earnings growth of 16.6%.
Price: MONDY