Packaging Corporation of America PKG
PKG's FY2025 revenue grew 7.2% to $8.99B with operating income of $1.26B, but net income fell 4.5% to $769M and diluted EPS declined to $8.58 from $8.93 as total debt surged to $4.36B from $2.77B, pressuring interest costs. Q2 2026 showed record corrugated shipments and an earnings beat driven by the Greif containerboard acquisition, yet adjusted earnings still declined year-over-year amid higher freight and input costs.
The stock trades at 31.9x P/E and 14.0x EV/EBITDA—68% and 44% premiums to peer medians—while the President and an EVP sold shares across August 2026 at $250–257, and 24-month insider net dollar flow is -$41.9M with all acquisitions being zero-price compensation grants. Hold pending evidence that debt-funded volume growth converts to EPS leverage or the valuation premium narrows toward peers.
What could go wrong
- Debt burden. Total debt rose to $4.36B at FY2025 from $2.77B at FY2024 following the Greif acquisition; interest costs are compressing net income despite revenue growth.
- Margin erosion. Gross margin declined from 24.7% in FY2022 to 21.0% in FY2025, and operating margin compressed from 16.8% to 14.0% over the same period, reflecting input cost and freight pressure.
- Rich valuation. P/E of 31.9x is 68% above the peer median of 19.0x, and EV/EBITDA of 14.0x is 44% above the peer median of 9.7x, leaving little room for execution missteps.
- Insider selling. Over the trailing 24 months, insider net dollar flow is -$41.9M; recent August 2026 sales by the President and an EVP at $250–257 per share with no open-market purchases signal limited insider confidence at current levels.
What would change my mind
Where this comes from: FMP FY2025 annual + derived_metrics · FMP FY2025 annual + derived_metrics · FMP FY2025 annual · peer_relative composite. Orin's read on PKG; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All PKG filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Price T Rowe Associates /Md/ | $1.4B | 0.1% of fund |
| Vanguard Capital Management | $1.4B | 0.0% of fund |
| State Street | $1.1B | 0.0% of fund |
| Vanguard Portfolio Management | $1.0B | 0.0% of fund |
| Jpmorgan Chase & | $882.4M | 0.0% of fund |
| Bank of New York Mellon | $748.1M | 0.1% of fund |
80 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 89 Form 4 filings, net −$41.0M. Of the 50 on hand, 0 were open-market purchases and 4 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about PKG
Orin answers questions about PKG from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 31.2× | 19.0× | 79.6× |
| EV/EBITDA | 13.7× | 10.8× | — |
| P/S | 2.25× | 1.86× | — |
| P/B | 4.6× | 3.6× | — |
Its P/E sits above all 5 of the last 5 years (+2.38σ from its own mean).
13.0%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$273
$246 – $312 · +14% against today's price
- 9 buy or overweight
- 15 hold
- 2 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| PKGPackaging Corporation of America | $21B | 31.2× | 13.7× | 20.1% | 7.2% | 15% |
| AMCRAmcor plc | $20B | 17.9× | 10.0× | 20.0% | 4.7% | 9% |
| BALLBall Corporation | $16B | 16.7× | 10.5× | 16.4% | 6.6% | 17% |
| BBYBest Buy Co., Inc. | $19B | 15.1× | 8.1× | 22.7% | 3.0% | 43% |
| GPCGenuine Parts Company | $18B | 495.2× | 32.4× | 36.2% | 0.1% | 1% |
| IPInternational Paper Company | $19B | — | — | 27.7% | -14.2% | -22% |
| SWSmurfit Westrock Plc | $24B | 47.3× | 8.6× | 17.9% | 1.6% | 3% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 74.1% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $187 | $217.29 · −14% | 2026-06-10 |
| Levered DCF | $194 | $217.29 · −11% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.