Research · Sep 3, 2026
[PKG] Packaging Corp Thesis 2026: Greif Deal Builds Scale and Starts Delever
Packaging Corporation of America (PKG) FY25 (Dec) revenue $8.989B (+7.2%); op income $1.255B (+14%); adj EBITDA $1.760B (+7.9%); adj EPS $9.84 (+8.8%); FCF $728.6M (+40%, record). Greif Containerboard acquisition closed Sep 2 2025 — added ~400K+ tons capacity, 3 mills (Massillon OH, Riverville VA, Wallula WA); Wallula restructuring complete mid-Feb 2026. Total debt $4.365B (up from $2.772B). Packaging segment FY25 EBITDA $1.83B, sales $8.3B, 22.1% margin (+130bp). Paper segment $148M EBITDA, $615M sales, 24.1% margin. Q4 FY25 record OCF $443M, FCF $124M. FY26 CapEx $840-870M (includes ~$250M gas turbine energy projects Jackson AL + Riverville VA). Q1 FY26 actual: packaging EBITDA $482M (22%); EPS $2.33. Q2 FY26 guide: $2.33; March 2026 containerboard price increase flowing through. FY26: DD&A ~$700M; interest ~$139M; tax 25%; dividends ~$450M. Deleverage target: 2-2.5x net debt/EBITDA. Risks: containerboard demand, Greif integration, input costs, pricing cycle, export headwinds.