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Investing.com -- BofA shifted ratings for U.S. packaging and paper stocks ahead of third-quarter results, upgrading Louisiana-Pacific and Karat Packaging to Buy, while downgrading Sonoco Products and Graphic Packaging to Neutral.
The brokerage said Louisiana-Pacific benefits from strong siding demand and market share gains, while Karat’s recent stock pullback makes it more attractive.
Whereas, Graphic Packagin and Sonoco face continued sluggish fundamentals and estimate revisions, with no clear inflection in demand or pricing trends.
BofA expects mixed results in 3Q, with overall EPS for the sector down roughly 13% versus prior forecasts, though packaging companies are expected to fare better with estimated 6% EPS growth.
Weak stock performance since June, when the group declined about 15% relative to the broader market, may ease market expectations for the quarter.
The brokerage highlighted Amcor, Crown, Packaging Corp, Sealed Air, and Silgan among its Buy-rated names, citing synergy gains, strategic initiatives, and favorable 2026 pricing as key drivers.
Paper and forest product peers may benefit from improved pricing trends in 2026, though near-term volume growth is limited.
BofA said it will continue monitoring sustainability momentum, capacity trends, and market share shifts as the sector works through ongoing macro pressures.