Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 8.8 |
| EV/EBITDA | 4.1 |
| Fwd P/E | 7.2 |
| PEG | 4.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 1.60
PKG · Why this verdict
Why Packaging Corporation of Americ (PKG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Packaging Corporation of America has strong near-term momentum with a breakout pattern and rising estimates, but customer concentration of 58% in ODP Corporation is a high-severity single-customer risk and the stock is already 10.8% above the analyst price target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
ODP Corporation represents 58% of Packaging Corporation's revenue — a high-severity single-customer concentration risk that means any loss or reduction in this relationship could eliminate more than half of the company's revenue base. Bear case | ODP Corporation concentration falls below 45% of revenue within 12 months as PKG diversifies its customer base, or ODP publicly commits to a multi-year supply agreement. | ↓Deteriorating |
| CounterLong-duration supply agreements with major customers are common in packaging; a 58% concentration may reflect a deeply integrated supply chain relationship that is actually stable and recurring. | ||
At $229.96, the stock is trading 10.8% above the analyst consensus price target with a negative asymmetry ratio of -0.87 — meaning the current price implies 10.8% downside to fair value before considering the 12.3% stop-loss level. Warnings | Analyst targets are revised upward above $250 to reflect improved estimates, or price retraces to below $215 to restore positive asymmetry. | ↓Deteriorating |
| CounterMomentum stocks with rising earnings estimates can trade above analyst targets for extended periods; the estimate revision trend is upward and actual estimates may be raised quickly. | ||
The stock has a golden cross technical pattern above all moving averages with RSI at 64, MACD bullish, and rising OBV — the momentum score of 7.4 out of 10 reflects genuine buying pressure. Momentum breakdown | Momentum score remains above 6.5 and the stock holds above all major moving averages for 3 consecutive months. | ↓Deteriorating |
| CounterNear-term negative asymmetry means the breakout has run ahead of fundamental support; a momentum-driven rally above the analyst target is the highest-risk type of breakout to chase. | ||
Packaging Corporation has beaten earnings in 2 of the last 4 quarters with 2 misses, and free cash flow is only 53% of net income — suggesting that approximately half of reported earnings are not being converted to cash. Quality breakdown | FCF conversion improves above 80% of net income and next earnings report in 36 days shows a positive surprise greater than 5%. | ↓Deteriorating |
| CounterLower FCF conversion in packaging companies can reflect capital investment cycles; the current capex may be building capacity that will generate above-average FCF in future periods. | ||
ODP Corporation represents 58% of Packaging Corporation's revenue — a high-severity single-customer concentration risk that means any loss or reduction in this relationship could eliminate more than half of the company's revenue base.
↓DeterioratingBear case
- Expectation
- ODP Corporation concentration falls below 45% of revenue within 12 months as PKG diversifies its customer base, or ODP publicly commits to a multi-year supply agreement.
CounterLong-duration supply agreements with major customers are common in packaging; a 58% concentration may reflect a deeply integrated supply chain relationship that is actually stable and recurring.
At $229.96, the stock is trading 10.8% above the analyst consensus price target with a negative asymmetry ratio of -0.87 — meaning the current price implies 10.8% downside to fair value before considering the 12.3% stop-loss level.
↓DeterioratingWarnings
- Expectation
- Analyst targets are revised upward above $250 to reflect improved estimates, or price retraces to below $215 to restore positive asymmetry.
CounterMomentum stocks with rising earnings estimates can trade above analyst targets for extended periods; the estimate revision trend is upward and actual estimates may be raised quickly.
The stock has a golden cross technical pattern above all moving averages with RSI at 64, MACD bullish, and rising OBV — the momentum score of 7.4 out of 10 reflects genuine buying pressure.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum score remains above 6.5 and the stock holds above all major moving averages for 3 consecutive months.
CounterNear-term negative asymmetry means the breakout has run ahead of fundamental support; a momentum-driven rally above the analyst target is the highest-risk type of breakout to chase.
Packaging Corporation has beaten earnings in 2 of the last 4 quarters with 2 misses, and free cash flow is only 53% of net income — suggesting that approximately half of reported earnings are not being converted to cash.
↓DeterioratingQuality breakdown
- Expectation
- FCF conversion improves above 80% of net income and next earnings report in 36 days shows a positive surprise greater than 5%.
CounterLower FCF conversion in packaging companies can reflect capital investment cycles; the current capex may be building capacity that will generate above-average FCF in future periods.
Per-dimension breakdown
Quality
3.9/10data confidence 71%| Component | Sub-score |
|---|---|
| Gross margin | 0.2 |
| Op margin | 6.0 |
| Net margin | 3.7 |
| Moat | 5.0 |
| Piotroski F | 4.4 |
- ▸No competitive moat
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.6 |
| EPS growth | 5.3 |
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 4.9 |
- ▸Overbought (RSI 72)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.9 |
| Price target | 6.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
| notable moves | 3.0 |
- ▸Modest insider selling — $10,196,077 (0.046% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 6.5 |
| growth rank | 7.2 |
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.7 |
| support resistance | 2.4 |
| 52w position | 9.2 |
| gap | 6.0 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 4.7 |
| volatility | 7.1 |
| put call | 10.0 |
| implied vol | 7.1 |
| max pain risk | 3.0 |
| beta | 8.4 |
| debt equity | 5.3 |
- ▸Above max pain $220
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.3 |
| dividend safety | 3.5 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.60
Upside
-5.7%
Downside
9.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.6=NEGATIVE outcome against Risk (lower is worse) at 6.7 and asymmetric R:R of -0.60.
The strongest dimensions are Risk (lower is worse) at 6.7, Sentiment at 6.2, and Momentum at 5.9; the weakest are Insider at 3.6, Quality at 3.9, and Technical at 4.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Customer Concentration Risk
Trip ifODP Corporation reduces or terminates its supply agreement, or any single customer exceeds 60% of revenue — signaling concentration risk is worsening.
- P2Price Above Analyst Target
Trip ifAnalyst consensus price target falls below $210.00, pushing the stock more than 10% above the revised target and worsening the asymmetry.
- P3Momentum Breakout Pattern
Trip ifPrice drops below the 200-day moving average and momentum score falls below 5.5, signaling the breakout pattern has failed.
- P4Mixed Earnings Fcf Quality
Trip ifEarnings miss consensus by more than 5% for 2 consecutive quarters and FCF conversion remains below 40% of net income.