Smurfit Westrock (NYSE:SW) Stock Price Down 6.7% Following Weak Earnings

Key Points

• Smurfit Westrock shares dropped 6.7% after the quarter as EPS missed expectations ($0.33 reported vs. $0.44 expected) despite revenue of $7.71B slightly beating estimates and EPS falling from $0.74 a year earlier.
• The company raised its quarterly dividend to $0.4523 (annualized $1.81) for a 4.8% yield, but the dividend payout ratio is high at 135.34%, raising questions about sustainability.
• Analysts hold a consensus "Moderate Buy" with a $53.91 target amid several lowered price targets, while insiders (CEO and CFO) sold shares and institutional ownership remains high at 83.38%.

Smurfit Westrock PLC (NYSE:SW - Get Free Report)'s stock price dropped 6.7% on Thursday following a weaker than expected earnings announcement. The stock traded as low as $36.69 and last traded at $37.0320. Approximately 2,119,843 shares changed hands during mid-day trading, a decline of 64% from the average daily volume of 5,963,073 shares. The stock had previously closed at $39.68.

The company reported $0.33 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.44 by ($0.11). Smurfit Westrock had a net margin of 2.24% and a return on equity of 6.10%. The company had revenue of $7.71 billion during the quarter, compared to analyst estimates of $7.59 billion. During the same quarter in the previous year, the company posted $0.74 EPS. The company's quarterly revenue was up .7% on a year-over-year basis.

Smurfit Westrock Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, March 18th. Stockholders of record on Tuesday, February 17th were issued a $0.4523 dividend. This represents a $1.81 annualized dividend and a dividend yield of 4.8%. The ex-dividend date was Tuesday, February 17th. This is a positive change from Smurfit Westrock's previous quarterly dividend of $0.43. Smurfit Westrock's dividend payout ratio (DPR) is currently 135.34%.

Analysts Set New Price Targets

SW has been the subject of several research analyst reports. The Goldman Sachs Group initiated coverage on shares of Smurfit Westrock in a report on Tuesday, March 24th. They issued a "buy" rating and a $49.00 target price for the company. UBS Group lowered their target price on shares of Smurfit Westrock from $60.00 to $56.00 and set a "buy" rating for the company in a report on Monday, April 13th. Truist Financial lowered their target price on shares of Smurfit Westrock from $60.00 to $53.00 and set a "buy" rating for the company in a report on Wednesday, April 15th. Citigroup reduced their price target on shares of Smurfit Westrock from $59.00 to $53.00 and set a "buy" rating for the company in a research report on Tuesday, April 14th. Finally, Jefferies Financial Group set a $58.00 price target on shares of Smurfit Westrock in a research report on Thursday, February 12th. Eleven research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $53.91.

Insiders Place Their Bets

In other Smurfit Westrock news, CFO Ken Bowles sold 10,000 shares of the company's stock in a transaction on Thursday, February 19th. The shares were sold at an average price of $51.26, for a total transaction of $512,600.00. Following the completion of the transaction, the chief financial officer owned 151,644 shares in the company, valued at approximately $7,773,271.44. This represents a 6.19% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Anthony P. J. Smurfit sold 40,000 shares of the company's stock in a transaction on Thursday, February 19th. The stock was sold at an average price of $51.54, for a total transaction of $2,061,600.00. Following the transaction, the chief executive officer owned 1,642,610 shares of the company's stock, valued at approximately $84,660,119.40. The trade was a 2.38% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.46% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Smurfit Westrock

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Sumitomo Mitsui Trust Group Inc. grew its stake in shares of Smurfit Westrock by 3.4% during the 1st quarter. Sumitomo Mitsui Trust Group Inc. now owns 1,179,837 shares of the company's stock worth $47,017,000 after purchasing an additional 39,013 shares during the period. Greenwood Capital Associates LLC grew its stake in shares of Smurfit Westrock by 7.5% during the 1st quarter. Greenwood Capital Associates LLC now owns 33,907 shares of the company's stock worth $1,351,000 after purchasing an additional 2,360 shares during the period. QRG Capital Management Inc. grew its stake in shares of Smurfit Westrock by 61.7% during the 1st quarter. QRG Capital Management Inc. now owns 16,526 shares of the company's stock worth $659,000 after purchasing an additional 6,307 shares during the period. HB Wealth Management LLC acquired a new position in shares of Smurfit Westrock during the 1st quarter worth $375,000. Finally, New York State Teachers Retirement System grew its stake in shares of Smurfit Westrock by 9.0% during the 1st quarter. New York State Teachers Retirement System now owns 354,796 shares of the company's stock worth $14,139,000 after purchasing an additional 29,278 shares during the period. 83.38% of the stock is owned by institutional investors and hedge funds.

Smurfit Westrock Stock Performance

The company has a current ratio of 1.48, a quick ratio of 0.95 and a debt-to-equity ratio of 0.73. The firm has a market capitalization of $19.88 billion, a price-to-earnings ratio of 28.53 and a beta of 1.06. The stock's 50 day moving average price is $41.76 and its two-hundred day moving average price is $40.57.

Smurfit Westrock Company Profile

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box.

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