PKG - Packaging Corporation: Strong Q4 Results But Valuation Is Elevated (Downgrade)

2024-01-25 13:11:27 ET

Summary

• Packaging Corporation of America reported solid earnings with better-than-expected margins, causing shares to rally 4%.
• Packaging Corporation's revenue was in line at $1.94 billion, down 2% from last year, but demand is expected to improve as excess inventory is worked down.
• The company's Q1 guidance is mixed, which is leading to my concerns about its high valuation, and it is a prudent time to reduce positions.

Packaging Corporation of America ( PKG ) has delivered for investors, returning about 34% over the past year. On Wednesday night, the company reported solid Q4 earnings with better-than-expected margins. This caused shares to rally 4% on Thursday....

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