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Packaging Corp. (PKG) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Packaging Corp. (PKG - Free Report) closed at $135.80, marking a -0.59% move from the previous day. This change lagged the S&P 500's 0.95% gain on the day. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.15%.

Heading into today, shares of the maker of containerboard and corrugated packaging products had lost 10.92% over the past month, lagging the Industrial Products sector's loss of 6% and the S&P 500's loss of 3.49% in that time.

Packaging Corp. will be looking to display strength as it nears its next earnings release. In that report, analysts expect Packaging Corp. to post earnings of $2.87 per share. This would mark year-over-year growth of 32.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.13 billion, up 13.42% from the year-ago period.

PKG's full-year Zacks Consensus Estimates are calling for earnings of $11.66 per share and revenue of $8.64 billion. These results would represent year-over-year changes of +24.17% and +11.77%, respectively.

Any recent changes to analyst estimates for Packaging Corp. should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Packaging Corp. is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, Packaging Corp. is currently trading at a Forward P/E ratio of 11.72. Its industry sports an average Forward P/E of 11.72, so we one might conclude that Packaging Corp. is trading at a no noticeable deviation comparatively.

Meanwhile, PKG's PEG ratio is currently 2.34. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PKG's industry had an average PEG ratio of 1.4 as of yesterday's close.

The Containers - Paper and Packaging industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 29, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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