Packaging Corporation of America (NYSE:PKG) Shares Gap Down on Disappointing Earnings

Key Points

• Packaging Corporation of America shares fell sharply after the company reported weaker than expected earnings, with a $2.73 EPS that missed estimates by $0.10.
• The firm announced a quarterly dividend of $1.25, yielding 2.4%, while setting its Q4 2025 EPS guidance at 2.400.
• Analysts have mixed views on the stock, with ratings ranging from "Strong Buy" to "Hold," and an average price target of $229.33.

Packaging Corporation of America (NYSE:PKG - Get Free Report) shares gapped down prior to trading on Thursday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $208.74, but opened at $199.35. Packaging Corporation of America shares last traded at $209.93, with a volume of 257,784 shares traded.

The industrial products company reported $2.73 EPS for the quarter, missing analysts' consensus estimates of $2.83 by ($0.10). The firm had revenue of $2.31 billion for the quarter, compared to analyst estimates of $2.29 billion. Packaging Corporation of America had a return on equity of 20.08% and a net margin of 10.47%.The business's revenue was up 6.0% compared to the same quarter last year. During the same period in the prior year, the firm posted $2.65 EPS. Packaging Corporation of America has set its Q4 2025 guidance at 2.400-2.400 EPS.

Packaging Corporation of America Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, October 15th. Stockholders of record on Monday, September 15th were issued a $1.25 dividend. This represents a $5.00 annualized dividend and a dividend yield of 2.4%. The ex-dividend date of this dividend was Monday, September 15th. Packaging Corporation of America's payout ratio is 49.90%.

Analyst Ratings Changes

Several equities analysts recently weighed in on PKG shares. Zacks Research upgraded Packaging Corporation of America from a "hold" rating to a "strong-buy" rating in a research note on Friday, September 26th. Citigroup lifted their price target on Packaging Corporation of America from $214.00 to $218.00 and gave the company a "neutral" rating in a research note on Monday, October 6th. Weiss Ratings restated a "buy (b-)" rating on shares of Packaging Corporation of America in a research note on Wednesday, October 8th. JPMorgan Chase & Co. assumed coverage on Packaging Corporation of America in a research note on Wednesday, September 24th. They set an "overweight" rating and a $242.00 price objective for the company. Finally, Wells Fargo & Company boosted their price objective on Packaging Corporation of America from $200.00 to $222.00 and gave the stock an "equal weight" rating in a research note on Tuesday, October 7th. Two investment analysts have rated the stock with a Strong Buy rating, three have given a Buy rating and four have given a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $229.33.

Insider Buying and Selling

In related news, CEO Mark W. Kowlzan sold 25,000 shares of the company's stock in a transaction that occurred on Thursday, September 11th. The stock was sold at an average price of $215.97, for a total value of $5,399,250.00. Following the transaction, the chief executive officer directly owned 437,378 shares in the company, valued at approximately $94,460,526.66. This represents a 5.41% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Corporate insiders own 1.50% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the business. Clearstead Trust LLC lifted its stake in Packaging Corporation of America by 118.6% during the first quarter. Clearstead Trust LLC now owns 129 shares of the industrial products company's stock worth $26,000 after purchasing an additional 70 shares in the last quarter. Bruce G. Allen Investments LLC increased its position in shares of Packaging Corporation of America by 72.2% during the second quarter. Bruce G. Allen Investments LLC now owns 136 shares of the industrial products company's stock worth $26,000 after acquiring an additional 57 shares during the period. TCTC Holdings LLC increased its holdings in Packaging Corporation of America by 86.4% in the first quarter. TCTC Holdings LLC now owns 151 shares of the industrial products company's stock valued at $30,000 after buying an additional 70 shares during the last quarter. Trust Co. of Toledo NA OH purchased a new position in Packaging Corporation of America in the second quarter valued at $33,000. Finally, Alpine Bank Wealth Management purchased a new position in Packaging Corporation of America in the first quarter valued at $39,000. 89.78% of the stock is currently owned by institutional investors and hedge funds.

Packaging Corporation of America Stock Down 0.9%

The stock has a market cap of $18.61 billion, a PE ratio of 20.73, a price-to-earnings-growth ratio of 1.22 and a beta of 0.91. The firm has a fifty day moving average of $211.21 and a 200 day moving average of $199.02. The company has a quick ratio of 2.32, a current ratio of 3.54 and a debt-to-equity ratio of 0.54.

Packaging Corporation of America Company Profile

Packaging Corporation of America engages in the production of container products. It operates through the following segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers a variety of corrugated packaging products, such as conventional shipping containers. The Paper segment manufactures and sells a range of papers, including communication-based papers, and pressure sensitive papers.

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