Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.5 |
| P/S | 8.8 |
| EV/EBITDA | 4.3 |
| Fwd P/E | 6.6 |
| PEG | 4.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 19.4x
- ▸PEG: 1.81
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.
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VerdictSELL
Overall score4.9/10
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. | →Stable |
| 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. | →Stable |
| 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. | →Stable |
| 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%. | →Stable |
| 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.
→StableBear 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.
→StableWarnings
- 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.
→StableMomentum 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.
→StableQuality 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
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 5.6 |
| Gross margin | 0.4 |
| Op margin | 5.4 |
| Net margin | 4.0 |
| Current ratio | 9.9 |
| FCF quality | 4.2 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 53% FCF/NI
- ▸No competitive moat
Growth
2.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 0.0 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 4.6 |
| erm sentiment | 6.3 |
- ▸Light analyst coverage (10.0) — signal dampened
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸Insider selling (low materiality) — $2,011,426 (0.009% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 6.4 |
| growth rank | 6.3 |
Technical
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.7 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 5.2 |
| volatility | 5.4 |
| put call | 7.9 |
| implied vol | 6.3 |
| max pain risk | 3.0 |
| beta | 8.0 |
| debt equity | 5.3 |
- ▸Above max pain $210
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 7.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
| dividend safety | 4.2 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.25
Upside
-15.5%
Downside
12.4%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 68, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 6.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.2=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.25 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 6.8, Risk (lower is worse) at 6.1, and Sentiment at 6.0; the weakest are Growth at 2.6, Technical at 3.3, and Catalyst at 4.7. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1ODP 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.
Trip ifODP Corporation reduces or terminates its supply agreement, or any single customer exceeds 60% of revenue — signaling concentration risk is worsening.
- P2At $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.
Trip ifAnalyst consensus price target falls below $210.00, pushing the stock more than 10% above the revised target and worsening the asymmetry.
- P3The 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.
Trip ifPrice drops below the 200-day moving average and momentum score falls below 5.5, signaling the breakout pattern has failed.
- P4Packaging 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.
Trip ifEarnings miss consensus by more than 5% for 2 consecutive quarters and FCF conversion remains below 40% of net income.