Paper & Packaging: Q2‘26 review: A bit messy, but on track to grow strongly in FY‘27

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Paper & Packaging: Q2‘26 review: A bit messy, but on track to grow strongly in FY‘27

J P M O R G A N North America Equity Research

31 July 2026

Paper & Packaging

Q2’26 review: A bit messy, but on track to grow strongly

in FY’27

We have summarized the puts and takes from Q2’26 earnings for Smurfit Westrock EMEA Forestry, Paper & Packaging

(SW) and International Paper (IP) below. Importantly, we emphasize that while and South African Industrials

FY’26 estimates have been weighed down by costs, FY’27 earnings should show Detlef Winckelmann AC

strong growth as implemented price increases (offsetting cost pressures as well as (44-20) 3493-5190

pricing appropriately for the tight supply/demand environment) begin to flow detlef.winckelmann@jpmorgan.com

through to box prices (see most recent note here). As of last week, North American J.P.LimitedMorgan Securities plc / J.P. Morgan Markets

corrugated producers have announced domestic linerboard price increases ranging Madhumita Phadke

between $80/t and $140/t. We err on the side of caution and only assume a $50/t (91-22) 6157-3935

price increase, yet this lands us 14% ahead of EBITDA consensus for IP and 3% madhumita.phadke@jpmchase.com

ahead of EBITDA consensus for SW (some analysts have already updated for J.P. Morgan India Private Limited

pricing since results yesterday). Due to these upward estimate revisions, both

names look attractive from a valuation perspective with IP and SW trading at an

FY27e EV/EBITDA of 6.5x and 6.4x, respectively. In terms of the pecking order,

we maintain our preference for Packaging Corp. of America (PKG) and SW. In the

case of PKG, it trades at a 30% premium to peers for a ROIC 2x better. For SW,

we are still expecting ~$800m in operational improvements from the business,