UPDATE: Goldman Sachs Starts Packaging Corp. of America (PKG) at Sell

September 22, 2016 6:42 AM EDT
Get Alerts PKG Hot Sheet
Price: $88.33 +2.65%

Rating Summary:
    8 Buy, 6 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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(Updated - September 22, 2016 9:09 AM EDT)

Goldman Sachs initiated coverage on Packaging Corp. of America (NYSE: PKG) with a Sell rating and a price target of $77, implying 6% downside. Analyst Brian Maguire said the stock's premium is unjustified, and he sees limited growth.

"Our rating is based on: 1) PKG’s 0.5x to 1.0x EBITDA valuation premium to Containerboard peers (IP, WRK, KS), which we believe is too high based on PKG’s non-Containerboard exposure to UCFS (14% of EBITDA); 2) our neutral to slightly negative view on Containerboard (86% of EBITDA), and in particular our view that investor expectations for price increases are too optimistic; 3) relatively few identifiable growth drivers within existing product lines," said Maguire.

For an analyst ratings summary and ratings history on Packaging Corp. of America click here. For more ratings news on Packaging Corp. of America click here.

Shares of Packaging Corp. of America closed at $81.66 yesterday.

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