Let’s dig into the relative performance of International Paper (NYSE:IP) and its peers as we unravel the now-completed Q2 industrial packaging earnings season.
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 8 industrial packaging stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.9% since the latest earnings results.
Weakest Q2: International Paper (NYSE:IP)
Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
International Paper reported revenues of $6.77 billion, up 42.9% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
International Paper pulled off the fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 13% since reporting and currently trades at $48.17.
Read our full report on International Paper here, it’s free.
Best Q2: Ball (NYSE:BALL)
Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Ball reported revenues of $3.34 billion, up 12.8% year on year, outperforming analysts’ expectations by 7%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.
Ball pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 13% since reporting. It currently trades at $50.15.
Is now the time to buy Ball? Access our full analysis of the earnings results here, it’s free.
Silgan Holdings (NYSE:SLGN)
Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Silgan Holdings reported revenues of $1.54 billion, up 11.4% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.
As expected, the stock is down 18.6% since the results and currently trades at $45.43.
Read our full analysis of Silgan Holdings’s results here.
Graphic Packaging Holding (NYSE:GPK)
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Graphic Packaging Holding reported revenues of $2.20 billion, down 1.5% year on year. This print topped analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
Graphic Packaging Holding had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is down 9.6% since reporting and currently trades at $20.91.
Read our full, actionable report on Graphic Packaging Holding here, it’s free.
Packaging Corporation of America (NYSE:PKG)
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Packaging Corporation of America reported revenues of $2.17 billion, up 4.6% year on year. This result missed analysts’ expectations by 0.8%. It was a slower quarter as it also logged a significant miss of analysts’ sales volume estimates.
The stock is up 3.2% since reporting and currently trades at $212.93.
Read our full, actionable report on Packaging Corporation of America here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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