Here's What Analysts Are Forecasting For Packaging Corporation of America (NYSE:PKG) After Its First-Quarter Results

Last week, you might have seen that Packaging Corporation of America (NYSE:PKG) released its quarterly result to the market. The early response was not positive, with shares down 4.3% to US$171 in the past week. It was a pretty mixed result, with revenues beating expectations to hit US$2.0b. Statutory earnings fell 2.2% short of analyst forecasts, reaching US$1.63 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Packaging Corporation of America

Taking into account the latest results, the consensus forecast from Packaging Corporation of America's eight analysts is for revenues of US$8.02b in 2024. This reflects a satisfactory 2.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.7% to US$8.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.95b and earnings per share (EPS) of US$8.85 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$175, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Packaging Corporation of America at US$197 per share, while the most bearish prices it at US$123. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Packaging Corporation of America'shistorical trends, as the 3.6% annualised revenue growth to the end of 2024 is roughly in line with the 4.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.6% annually. So it's pretty clear that Packaging Corporation of America is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Packaging Corporation of America. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$175, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Packaging Corporation of America analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Packaging Corporation of America has 2 warning signs we think you should be aware of.

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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.