WestRock Earnings: Lower Index Pricing Weighs on Margins Despite Additional Cost Savings Gains

No-moat WestRock reported fiscal first-quarter earnings that were largely in line with our expectations. Net sales fell 6% year over year as WestRock faced another challenging quarter. While demand headwinds persist, WestRock also navigated lower index pricing in the quarter, which affected much of its business. While inventory destocking trends have moderated from their peaks in 2023, WestRock still experienced volume declines across much of its portfolio as some demand headwinds persisted through December. That said, WestRock noted that it expects significant recovery will occur in the second half of 2024. We maintain our $55 fair value estimate.