Jefferies Cuts Price Target on Packaging Corp. (PKG) to $93; Reiterates Buy
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Jefferies maintained a Buy rating on Packaging Corp. of America (NYSE: PKG), and cut the price target to $93.00 (from $96.00), following the company's 3Q earnings report. Jefferies decided to cut estimates to reflect the full $15/ ton cut in linerboard flowing through all of its box business. PKG was also more forthcoming on the containerboard price increase than anticipated, and even baked in pricing in 4Q16.
Analyst Philip Ng commented, "While investors were focused on box pricing in 3Q, we thought mgmt's commentary on the Oct price hike was constructive and gives us confidence it will stick. Separately, with PKG will likely running out of board capacity by late 2017 / early 2018, we believe it's likely to pursue a mill acquisition, which provides good optionality for the stock."
Shares of Packaging Corp. of America closed at $81.13 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesJefferies & Co, Earnings, Definitive Agreement
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