PKG
Packaging Corporation of America
$233.07
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 41.1% above fair value
You pay
$233.07
Bear
$132.16
Fair
$165.20
Bull
$198.24
Bear
$132.16
-43.3%
$9.09 × 12x P/E
Fair
$165.20
-29.1%
$9.09 × 15x P/E
Bull
$198.24
-14.9%
$9.09 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $251.80 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $165.20 per share.
Warnings
Wall Street's average price target is $251.80 (from 26 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples