Analyst sees growth in paperboard sector

An investment analyst and strategist has upgraded the stock of Lake Forest, Illinois-based Packaging Corp. of America (PCA) based in part on “the increased use of paper products as consumers stock up on goods in response to the coronavirus.”

Argus Research Quantitative Portfolio Strategist David Coleman also writes that he foresees “restaurant closures and other restrictions related to the pandemic to increase the use of paper products” in the United States in the near term.

Coleman says Argus has thus raised its rating on PCA to “buy” from “hold,” and is setting a target price of $118 per share. The morning of March 25, PCA stock was trading at $79.17 per share.

In its corporate Responsibility Report covering 2018, PCA says it used 1.07 million tons of recovered fiber to help produce the 5.1 million tons of paper and board it made that year.

The company currently operates six containerboard mills and two uncoated freesheet (office paper) mills in the U.S. The uncoated freesheet mills operate under the Boise Paper name.