Packaging Corp of America: Q2‘26 review: "One word to describe the environment and that is tight"

Research evidence excerpt

Packaging Corp of America: Q2‘26 review: "One word to describe the environment and that is tight"

.3%

demand growth with bookings/billings up ~1.5% y/y for the legacy business. Adj. EBITDA - 27E ($ mn) 2,460 2,492 1.3%

Furthermore, while Q2’26 volumes were boosted by Amazon Prime Day

Quarterly Forecasts (FYE Dec)

moving forward by a quarter, management has seen little evidence of a FIFA

Adj. EBITDA ($ mn)

World Cup boost or any pre-buying of linerboard (partly because there is no 2025A 2026E 2027E

spare inventory to sell). Q1 421 486A 618

Q2 451 486A 634

• Pricing. So far, we have seen linerboard prices increase by $100/t since Q3 503 578 657

January 2026. As always, this flows into box pricing with a lag. PKG has Q4 486 558 583

implemented ~25% of the first round of linerboard price increases in its box FY 1,862 2,108 2,492

business in Q2’26 and will see the remaining ~75% implemented in Q3’26. Style Exposure

Furthermore, during Q3’26, it will start to implement the second round of

linerboard price increases. We estimate that ~30% of this second linerboard

price increase will be seen in box prices during Q3’26 with the remainder

implemented in Q4’26.

• Costs. Freight, recycled fiber, fuel, and electricity prices are all expected to

increase sequentially from Q2’26 to Q3’26. On our estimates, this accounts for

a ~$0.12/share EPS headwind q/q. Aside from these variable costs, planned

maintenance costs will be lower by ~$0.04/share vs. Q2’26.

• Greif. Excluding depreciation benefits, Greif generated ~$0.10/share in EPS

in Q2’26 vs. our initial expectations of ~$0.05/share. We estimate that this puts

Greif at an EBITDA of ~$40m in Q2’26 vs. historic levels closer to $50-60m

in a weaker pricing environment. Accordingly, we still see ~$0.15-0.20/share