PKG changes
Pick any two versions below to diff them.
- Price
- $250.58
- Discount category
- Far above intrinsic value
- Next earnings
- Jan 21, 2027
- Next earnings is estimate
- Yes
- Company name
- added: Packaging Corporation of America
- Sector
- added: Containerboard and corrugated packaging
- About
- added: Packaging Corporation of America (PCA) is based in Lake Forest, Illinois. It is the third largest producer of containerboard in North America and a leading producer of uncoated freesheet paper. It runs ten mills and 90 corrugated products plants and related facilities. It has two segments: Packaging, which makes containerboard and corrugated boxes and displays, and Paper. Net sales were $2,601.7 million in Q3 2026 and $7,459.3 million for nine months. PCA bought the containerboard business of Greif on September 2, 2025 for $1.8 billion in cash. The common stock trades on the NYSE in US dollars. PCA files 10-K and 10-Q reports.
- Thesis
- added: The price of PCA reflects a strong earnings run and the gains that it expects from higher containerboard prices and the Greif mills, and it depends on whether price rises outrun costs. Q3 2026 earnings excluding special items were $3.04 per share against $2.73 a year before, and the acquired Greif operations added $0.24 of the rise. In the legacy business, price and mix added $0.79 per share and higher costs took back $0.91. For the price to hold or rise, four things must be true. The announced containerboard and corrugated price increases must hold. Freight, recycled fiber, chemical and energy costs must stop rising faster than prices. The Greif mills must keep improving. The antitrust class action and the Justice Department subpoena must not lead to large costs. The Q4 2026 report, expected in late January 2027, with its first 2027 guidance, is the next test. If price rises fail or costs keep rising, the price can fall.
- Risks
- added: Costs are rising. Higher costs, mainly labor, freight, corporate expense and fiber, took back $0.91 per share of the gains in the legacy business in Q3 2026. PCA expects freight, fiber, chemical and energy costs to rise further in Q4. Antitrust cases are open. A purported class action in the Northern District of Illinois says that containerboard producers conspired to raise prices and seeks treble damages. On September 4, 2026, the court denied the defendants' motion to dismiss, so the case continues. PCA also got a Justice Department grand jury subpoena in late September 2026. PCA cannot estimate a loss. Demand is mixed. Legacy corrugated shipments were 0.5% lower in Q3 2026, with weakness in agricultural end markets, and more e-commerce volume weakens the mix. Debt grew with the Greif purchase. Long-term debt was $3,969.7 million at September 30, 2026, and net interest expense was $98.3 million for nine months against $45.2 million. Mill operations affect output. Maintenance outages at three mills lower Q4 production, and PCA expects capital spending of $865 million to $890 million in 2026.
- Balance sheet
- added: Cash: $762M Debt: $4.0B Net debt: $3.2B Undrawn credit line: $573M At September 30, 2026, PCA had long-term debt of $3,969.7 million. Cash and cash equivalents were $534.6 million and marketable debt securities and other were $227.2 million, which is $761.8 million in all. Unused revolving credit, net of letters of credit, was $573 million. Net interest expense was $98.3 million for nine months. Capital spending was $617.9 million for nine months, and PCA expects $865 million to $890 million for 2026. It paid dividends of $356.9 million in nine months and has $224.3 million left in its share repurchase program. As of Sep 30, 2026.
- Checkpoints
- added: Jan 21, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: Earnings excluding special items are at or above the guided $2.81 per share and the 2027 outlook shows prices holding, and this passes; earnings below $2.81 or weaker prices fail.
- Recent events
- added: Oct 21, 2026: PCA reported Q3 2026 results. Net income was $262 million, or $2.93 per share, and $3.04 per share excluding special items. Corrugated products shipments rose 10.6%, and fell 0.5% in the legacy business. PCA expects Q4 earnings of $2.81 per share excluding special items, with mill maintenance outage costs that are significantly higher. Sep 30, 2026: In late September 2026, PCA received a grand jury subpoena from the Antitrust Division of the Department of Justice for documents about its business. It said that it is cooperating fully. Sep 4, 2026: The court in the containerboard antitrust class action denied the joint motion to dismiss that PCA and the other defendants filed. PCA says that the claims have no merit and that it will defend the case. It cannot estimate a range of possible losses. PCA gave this news in its Q3 2026 10-Q, filed on November 5, 2026. Sep 2, 2026: The board declared a regular quarterly dividend of $1.50 per share, paid on October 15, 2026. PCA had raised its annual dividend rate from $5.00 to $6.00 per share in Q2 2026. Dec 3, 2025: PCA announced the permanent shutdown of the No. 2 paper machine and the kraft pulping facilities at its Wallula, Washington mill. The work finished in Q1 2026 and cost about $188.0 million before tax.