Analyst Note – Citi Paper & Packaging Picks
Citi analysts have identified four paper‑and‑packaging companies—Crown Holdings, Sonoco Products, Packaging Corporation of America and Ardagh Metal Packaging—as the sector’s top picks ahead of the second‑quarter earnings season. The firm expects underlying demand to remain in line and recent price hikes in containerboard and solid bleached sulfate to support earnings commentary.
Crown Holdings is projected to post second‑quarter earnings per share of $2.20, slightly above the consensus estimate of $2.15. EBITDA is modelled at $544 million, a 1 % decline year‑over‑year, while beverage‑can volumes are anticipated to rise 4.3 % YoY. Citi maintains a Buy rating, valuing the company at 9.0 × next‑twelve‑months EBITDA versus a five‑year average of 9.1 ×. The company later reported adjusted Q2 earnings of $2.49 per share, beating estimates and raising its full‑year profit outlook; JPMorgan subsequently downgraded the rating to Neutral, whereas BMO and Truist lifted their price targets.
Sonoco Products is forecast to earn $1.52 per share compared with the consensus $1.43. Second‑quarter EBITDA is expected to reach $333 million, up 2 % YoY. Full‑year EBITDA guidance of $1.25‑$1.35 billion is projected, and Citi retains a Buy rating with a valuation of 7.8 × next‑twelve‑months EBITDA. The company announced a price increase for its uncoated recycled paperboard in the United States and Canada and declared a quarterly dividend of $0.54 per share. Truist named Sonoco a “best idea” citing pricing power and productivity.
Packaging Corporation of America is expected to deliver earnings per share of $2.30 versus a consensus of $2.32, and EBITDA of $489 million, representing an 11 % year‑over‑year increase. Citi assigns a Neutral rating, applying a valuation multiple of 10.9 × versus a five‑year average of 9.9 ×. The company indicated it may fall short of its second‑quarter earnings guidance; Wells Fargo downgraded the rating to Equal Weight, while Truist again listed it as a “best idea.”
Ardagh Metal Packaging is projected to post earnings per share of $0.06, marginally above the consensus $0.05. The firm may modestly raise its 2026 EBITDA guidance following first‑quarter outperformance and supportive demand trends. Ardagh reported first‑quarter earnings of $0.05 per share on revenue of $1.5 billion, surpassing market expectations for both metrics.
Overall, Citi expects the paper and packaging sector to deliver mostly upbeat results, with price‑driven margin expansion and stable demand underpinning the forecasts.