Packaging & Paper/Forest Products: 2Q Preview: Rebound & rebalance; U/G ATR, D/G GEF IP OI SLVM, Resume GPK

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Packaging & Paper/Forest Products: 2Q Preview: Rebound & rebalance; U/G ATR, D/G GEF IP OI SLVM, Resume GPK

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Packaging & Paper/Forest Products

2Q Preview: Rebound & rebalance; U/G

ATR, D/G GEF IP OI SLVM, Resume GPK

Price Objective Change

Lackluster demand, sluggish volumes persist 14 July 2026

It’s hardly a time to celebrate the sector. While the stocks have risen 5-10% since May, Equity

demand remains lackluster and volumes weak, outside of beverage cans and selected United States

specialty markets. Inflation headwinds should fade in 2H26 (assuming a renewed Packaging & Paper/Forest Products

Mideast ceasefire), but FX could become an earnings risk. We shift toward names with George L. Staphos

stronger visibility, cash flows and balance sheets over stocks with cyclical recovery Research Analyst

potential. We are raising our POs for 3 of paper stocks and 9 of packaging stocks. BofAS+1 646 855 4495

george.l.staphos@bofa.com

Cans lead; Specialty & Containerboard ok. Others so-so Reinhardt van der Walt >>

It’s now consensus but beverage cans remain our preferred subsector given stronger Research Analyst

MLI (UK)

demand, improving aluminum economics, innovation, and the World Cup. We are, +44 20 7995 9270

however, cautious on glass and paper, where volume weakness and potential operating- reinhardt.vanderwalt@bofa.com

rate pressures could weigh on outlooks. Containerboard is okay, but that’s because of

pricing strength rather than demand. Specialty/dispensing have good risk reward.

Exhibit 1: Price Objectives Changes

A summary of PO changes in this report“Bond” growth? Look towards capital allocation

We have long held the view that packaging/forest companies are “bonds masquerading New Old