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WestRock Co WRK

Morningstar Rating
$45.29 +0.26 (0.58%)
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Company Report

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.

Price vs Fair Value

WRK is trading within a range we consider fairly valued.
Price
$45.29
Fair Value
$11.00
Uncertainty
High
1-Star Price
$39.97
5-Star Price
$74.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

WestRock’s strategic transformation will remove low-performing assets from its portfolio, which will enable margin expansion and higher returns on invested capital.

Bears

Despite a period of attractive margin expansion in containerboard production, the best days are behind WestRock as new capacity weighs on linerboard prices.

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News

Trading Information

Previous Close Price
$45.03
Day Range
$45.2345.96
52-Week Range
$26.8445.96
Bid/Ask
$45.24 / $45.50
Market Cap
$11.64 Bil
Volume/Avg
133 / 2.5 Mil

Key Statistics

Price/Earnings (Normalized)
16.96
Price/Sales
0.58
Dividend Yield (Trailing)
2.55%
Dividend Yield (Forward)
2.67%
Total Yield
2.55%

Company Profile

WestRock manufactures corrugated packaging and consumer packaging, such as folding cartons and paperboard. After the merger of RockTenn and MeadWestvaco in fall 2015, WestRock became the largest North American producer of solid bleached sulfate and the second-largest producer of containerboard, which is used in the production of shipping containers.
Sector
Consumer Cyclical
Industry
Packaging & Containers
Stock Style Box
Mid Value
Total Number of Employees
56,100

Competitors

Valuation

Metric
WRK
IP
WY
Price/Earnings (Normalized)
16.9616.2933.71
Price/Book Value
1.141.462.45
Price/Sales
0.580.653.28
Price/Cash Flow
7.326.7318.26
Price/Earnings
WRK
IP
WY

Financial Strength

Metric
WRK
IP
WY
Quick Ratio
0.741.161.94
Current Ratio
1.551.672.94
Interest Coverage
−2.441.464.08
Quick Ratio
WRK
IP
WY

Profitability

Metric
WRK
IP
WY
Return on Assets (Normalized)
2.44%3.18%4.36%
Return on Equity (Normalized)
6.68%8.88%7.28%
Return on Invested Capital (Normalized)
5.65%6.56%5.96%
Return on Assets
WRK
IP
WY
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Economic Moat
Market Cap
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AVY
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PKG
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AMCR
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IP
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CCK
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SON
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SEE
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SLGN
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