Valued at a market cap of $27.9 billion, Smurfit Westrock Plc (SW) manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products. The Dublin, Ireland-based company is one of the largest integrated producers of containerboard, high-graphics preprinted linerboard, and paper recyclers in North America.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and SW fits right into that category with its market cap exceeding this threshold. The company is a global leader in sustainable paper and packaging and operates in over 40 countries with over 500 packaging converting operations and 62 paper mills.
Smurfit Westrock is currently trading 5.9% below its 52-week high of $56.99, reached on Nov. 22. Shares of this packaging company have declined 2.5% over the past month, underperforming the broader Consumer Discretionary Select Sector SPDR Fund (XLY) 1.7% returns during the same time frame.
Moreover, over the past three months, SW has soared 8.5%, lagging behind XLY’s 12.8% returns.
To confirm its recent bearish trend, SW has been trading below its 10-day moving average since mid-December. However, it has remained above its 50-day moving average since late October.
On Oct. 30, shares of SW surged 12% following its Q3 earnings release. The company’s net sales increased by a whopping 163.2% year-over-year to $7.67 billion. Positive impacts of acquisitions and growth in corrugated volumes contributed to the top-line growth. However, its net income decreased by $379 million, to a net loss of $150 million primarily due to higher COGS, selling, general and administrative (SG&A) expenses, and significant transaction and integration-related expenses.
Significant revenue growth and a 141% annual increase in adjusted EBITDA to $1.3 billion might have overshadowed the decline in the bottom-line figure and led to its upward price movement.
SW has outpaced its rival, Ball Corporation (BALL), which declined 11.5% over the past month and 19% over the past three months.
Despite Smurfit Westrock’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 13 analysts covering it, and the mean price target of $61.38 suggests a modest 14.5% premium to its current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- Is This Penny Stock a Buy After a 140% Rally in ONE Day?
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