SLGN - Cyclical rotation should reward paper/packaging picks in 2021 Citi says

A dive into paper and packaging for 2021 has Citi looking to the upside, raising its above-consensus estimates alongside the belief that a rotation into value can keep on going. Packagers in 2020 performer roughly in line with the broader market - up 16.6% - with canmakers pulling the weight with 22%-plus gains (making up for plastic and glass packagers, which rose 10.4%). Meanwhile paper underperformed, gaining 3.4% during the year amid some sharper estimate cuts (along with some dividend cuts) in the pandemic. After Pfizer's vaccine announcement, though, Paper has outperformed Packaging and the S&P 500, Citi notes - part of a broader value/cyclical rotation. Paper offers a "compelling" risk/reward as containerboard stocks are still near an all-time low vs. S&P even with a strong Q4. "Producers enter the year with solid price/vol momentum, and we think the demand acceleration seen in 2H ’20 should continue in 1H '21,"

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Cyclical rotation should reward paper/packaging picks in 2021, Citi says