PKG
Packaging Corporation of America
$215.91
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.7% above fair value
You pay
$215.91
Bear
$132.15
Fair
$165.19
Bull
$198.22
Bear
$132.15
-38.8%
$9.09 × 12x P/E
Fair
$165.19
-23.5%
$9.09 × 15x P/E
Bull
$198.22
-8.2%
$9.09 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
23.8x
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 $251.75 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $165.19 per share.
Warnings
Wall Street's average price target is $251.75 (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