Earnings Update: Here's Why Analysts Just Lifted Their Packaging Corporation of America (NYSE:PKG) Price Target To US$195

Packaging Corporation of America (NYSE:PKG) just released its latest quarterly results and things are looking bullish. The company beat expectations with revenues of US$2.1b arriving 2.5% ahead of forecasts. Statutory earnings per share (EPS) were US$2.21, 2.9% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Packaging Corporation of America

Taking into account the latest results, the most recent consensus for Packaging Corporation of America from nine analysts is for revenues of US$8.23b in 2024. If met, it would imply a satisfactory 3.8% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 10% to US$8.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.12b and earnings per share (EPS) of US$8.67 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.8% to US$195. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Packaging Corporation of America, with the most bullish analyst valuing it at US$219 and the most bearish at US$130 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Packaging Corporation of America's growth to accelerate, with the forecast 7.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.2% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Packaging Corporation of America is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Packaging Corporation of America going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Packaging Corporation of America that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com