Packaging: Clarity Emerges on the Third Containerboard Price Hike; Boxboard Hikes Follow

Research evidence excerpt

Packaging: Clarity Emerges on the Third Containerboard Price Hike; Boxboard Hikes Follow

Packaging

28 July 2026 Citi Research

Risks

SW is High Risk based upon our quantitative model, but assigning a High Risk rating is not supported by SW’s growth

prospects and generally defensive business model. Thus, a High Risk rating has not been applied. Key risks to achieving or

surpassing our target price include:

Supply/demand – SW operates in competitive markets; if other producers add capacity, it could cause industry prices and SW

earnings to decline. Weaker demand for SW’s Packaging from consumer and industrial customers could further cause earnings

to decline.

Raw material volatility – SW's containerboard production requires the purchase of raw materials including natural gas, fiber

and chemicals. Prices for these raw materials are volatile, and movement of prices may cause SW to miss/exceed its earnings

estimates.

Integration risk – SW was created through the combination of Smurfit Kappa and WestRock. Large cross-border mergers can

be difficult to execute, and if SW encounters operational difficulties or is unable to achieve synergies, earnings may be weaker

than expected.

Sonoco Products Company

(SON.N; US$58.68; 1; 27 Jul 26; 16:00)

Valuation

We use EV/EBITDA as our primary valuation methodology with a SOTP analysis as a secondary check. We assign an 8.0x

multiple to estimated NTM EBITDA to derive an enterprise value of $10.7B and arrive at a $65 target price. Over the past 10

years, SON has traded at an average multiple of 8.6x, within a 7.0-10.5x range.

We see the following risks that could prevent SON from achieving our rating and target price:

Volume Pressure – When CPG companies raise prices volumes have historically suffered. With inflation driving aggressive