Summer Price Hikes Supportive on Bullish View on WestRock(WRK) and Graphic Packaging (GPK) - Deutsche Bank

Deutsche Bank analsyt Debbie Jones notes RISI reported after market close yesterday (7/11) that WestRock (NYSE: WRK) and Graphic Packaging (NYSE: GPK) have informed customers they will increase prices for coated unbleached kraft (CUK) grades by $50/ton effective early August. GPK's date was confirmed as August 9th.

Jones said announcement puts into play two questions: 1) are numbers for 2019 too low (especially for GPK) and 2) is an SBS boxboard hike on the horizon?

"While it is unclear to us if the full amount of the hike will go through, we expect prices for CUK will increase in the fall given supply/demand appears in balance and WRK/GPK represents ~90% of domestic production with a collective 2.6M tons of capacity," she commented. "We think this news is supportive of our Buy ratings on both GPK and WRK."

You May Also Be Interested In

• META to capture largest share of users, SNAP to benefit from ad budget shifts - Canaccord Genuity weighs in on TikTok ban
• Amazon.com (AMZN) PT Raised to $215 at UBS
• Teradyne (TER) PT Raised to $125 at TD Cowen