Bond.az - UBS upgraded Packaging Corp. of America (NYSE:PKG) from Neutral to Buy with a price target of $248.00, raised from $232.00. The company, with a market capitalization of $18 billion, currently trades at a P/E ratio of 25.
The firm expects the $50 per ton June price increase to hold amid improving demand and tight supply. High utilization rates and prior capacity cuts of 10% of industry capacity support pricing power.
The price increase could potentially add approximately $290 million in annualized EBITDA, with half expected to materialize in 2026. UBS's 2026 and 2027 EBITDA estimates are 1.6% and 2.0% ahead of consensus, respectively.
According to Bond.az, UBS believes the market is pricing in EBITDA 4% and 10% below its 2026 and 2027 estimates. The firm notes that Packaging Corp. of America has zero exposure to the more fragmented European market.
