PCA Should Benefit From Higher Containerboard Prices, but Some Demand Headwinds Remain

Packaging Corp. of America manufactures packaging products and uncoated freesheet paper. It accounts for roughly 10% of the North American containerboard market and is the third-largest producer. The majority of the company's containerboard is used internally to produce corrugated packaging, with the remainder sold to external customers. A decade of consolidation in the corrugated packaging industry allowed PCA to raise prices aggressively, but increased competitive intensity from legacy paper producers has limited pricing power in recent years.