Pettinari on Paper & Packaging: Halftime Report; Gauging Further Upside for SON

Research evidence excerpt

Pettinari on Paper & Packaging: Halftime Report; Gauging Further Upside for SON

Pettinari on Paper & Packaging

29 June 2026 Citi Research

Halftime report – As we near the halfway mark on 2026, Paper & Packaging stocks

are up +3.9% YTD with both sub-sectors up modestly (Paper +2.5%, Packaging

+4.5%). Returns amongst the group are extremely dispersed with SON (+26.3%),

BALL (+16.7%) and SLGN (+14.5%) meaningfully outperforming OI (-34.2%) & GPK

(-26.9%). In our recent conversations with investors, sentiment feels most positive

towards Canmakers (BALL, CCK, AMBP) given a level of comfort with long-term vol

outlooks in both developed & emerging markets, potentially conservative guides,

and tight cost pass-throughs. Conversely, sentiment towards Containerboard (IP,

SW, PKG) appears mixed, with some investors seeing modest downside risk to 2Q

& FY ’26 est. as pricing actions won’t flow-through until ’27 for the most part;

investors have also voiced concerns that recent box shipment strength is pre-buy

that will fade into the summer. Heading into 2Q earnings season our top picks are

BALL, SW & SON. Looking at Citi’s Quant Crowding scores, the Canmakers screen

as somewhat crowded (76th percentile avg.), ranking 1st, 2nd and 4th within the

group. Containerboard is mixed with IP screening as crowded (75th percentile), SW

mixed (46th) and PKG not crowded (27th). Sentiment remains cautious on

Packagers with more exposure to food and other traditional packaged goods;

AMCR, GPK, SLGN & SON are all in the bottom quartile.

Figure 1. Citi Quant Crowding Scores

Lower Higher

Consensus

HighRanking= Growth Expensive Short Macro Short

Buy

Interest Risk

Previous M/M

Crowding Quant Relative Short Macro Crowding

Ticker Sentiment Crowding Crowding

Rank Factor Valuation Interest Risk Rank