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Investing.com - BofA Securities downgraded SCG Packaging (NYSE:PKG) PCL (BKK:SCGP) from Buy to Underperform and lowered its price target to THB15.80 from THB20.50.
The downgrade reflects weakening leading indicators of packaging paper spreads and pulp prices, according to the research firm. BofA Securities also cited the fading benefits from restocking demand and low recovered paper (RCP) cost as factors in its decision.
The new price target is based on 2026 estimates and reflects a lower EV/EBITDA target of 9.2x, down from the previous 10.5x. This valuation sits near two standard deviations below the company’s long-term mean since its IPO in 2020 and aligns with the mean of its peers.
BofA Securities considers SCG Packaging’s current valuations demanding, with 2026 estimated EV/EBITDA of 9.4x exceeding the global peers’ mean of 8.7x. The company’s price-to-earnings ratio of 19.4x also stands significantly higher than the global peers’ mean of 13.4x.
The research firm rolled over to the new price objective based on 2026 estimates to reflect these valuation concerns and industry indicators.
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