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On Wednesday, Truist analysts highlighted the potential benefits for WestRock Company (NYSE:WRK), a $23.57 billion market cap company with annual revenue of $21.11 billion, and International Paper Company (NYSE:IP) following a recent announcement from Saica, one of Europe’s leading containerboard producers. Saica has declared a price increase on recycled containerboard (RCCM) of €60 per metric ton across most of Europe, starting April 1. This move comes as a response to the escalating costs of paper for recycling (PfR), a key feedstock for RCCM.
Saica’s announcement is seen as a follow-up to a previous price hike by WestRock (SW), which raised its brown RCCM prices by €100 per metric ton effective February 1, with €80 of this increase being realized in Germany, France, and Poland. This increase came after a €100 per metric ton drop in RCCM pricing from September 2024 to January 2025 in the same regions. According to InvestingPro analysis, WestRock maintains a FAIR financial health score, with a notable dividend yield of 3.82%.
The Truist analysts also noted that higher testliner prices, a type of recycled board, should bode well for kraftliner prices. Kraftliner often has its pricing set relative to testliner, and producers including WestRock and SCA have announced price increases for kraftliner effective March. InvestingPro data reveals that WestRock’s net income is expected to grow this year, with multiple additional insights available to subscribers. The analysts believe that the increase in containerboard prices, coupled with delayed capacity additions, could signal improved market conditions for European containerboard.
This development is particularly favorable for International Paper through its recent acquisition of DS Smith, a European producer, which could benefit from the positive pricing dynamics in the region. Truist’s commentary underscores the interconnected nature of the containerboard market and how price movements by one producer can have ripple effects across the industry, influencing other major players. For detailed analysis of both companies’ valuations and growth prospects, visit InvestingPro.
In other recent news, Smurfit Westrock has been in the spotlight with several key developments. The company reported fourth-quarter earnings that fell short of expectations and provided a first-quarter guidance below the consensus estimate of $1.31 billion, forecasting $1.25 billion instead. Analysts from Citi and Jefferies have adjusted their price targets for Smurfit Westrock, with Citi lowering it to $58 while maintaining a Buy rating, and Jefferies reducing it to $18, also with a Buy rating. Truist Securities, however, initiated coverage with a Buy rating and a price target of $62, reflecting confidence in the company’s strategic direction post-merger.
Additionally, Smurfit Westrock announced the appointment of Carole L. Brown as an independent director, enhancing its board with her extensive financial expertise. This comes as Dmitri Stockton plans to step down from the board after the upcoming Annual General Meeting. The recent merger of Smurfit Kappa Group (LON:SWR) and WestRock Company has positioned Smurfit Westrock as a significant player in the packaging industry, with anticipated revenues of approximately $32 billion in 2025. The company is on track to realize $400 million in synergies by the end of the year, with more synergies expected in the future. As Smurfit Westrock navigates these changes, investors will be watching closely to see how the company leverages its expanded capabilities and resources.
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