Packaging Corporation of America (PKG) Company Bio
Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products in the United States, Europe, Mexico, and Canada. The company was founded in 1867 and is based in Lake Forest, Illinois.
PKG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Packaging Corp Of America with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Packaging Corp Of America ranked in the 52th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 40%. In terms of the factors that were most noteworthy in this DCF analysis for PKG, they are:
Packaging Corp Of America's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 20.58% of tickers in our DCF set.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than merely 24.16% of stocks in its sector (Consumer Cyclical).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as PKG, try CSV, GPC, LUVU, SMP, and EYE.
Packaging Corp's (PKG) second-quarter results are likely to reflect strong demand for critical products amid the coronavirus crisis, offset by lower demand for paper consumption in schools and offices.
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