Packaging Corporation of America (PKG) DCF Valuation
TGM's two-stage DCF values Packaging Corporation of America (PKG) between $79.50 and $178.69 depending on assumptions, with a base case of $118.92. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (8.3%) reflects its beta.
What would today's price require?
$232.83 is justified only if free cash flow grows about +19.0% a year (fading to 2.5% long-run) at a 8.3% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 2.7%/yr | 9.3% | $79.50 |
| Base case | 5.7%/yr | 8.3% | $118.92 |
| Optimistic | 8.7%/yr | 7.3% | $178.69 |
| Analyst DCF (FMP) | independent reference — different model | $184.52 | |
Current Price
$232.83
Market-Implied Growth
+19.0%/yr
vs +4.9% 5Y actual
Model Scenario Range
$79.50 – $178.69
model output — not a price target
PKG DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for PKG (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $699.7M · 0.09B shares · net debt $3.5B
Estimated Fair Value
$137.98
-40.7% vs $232.83
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.7%/yr FCF growth and 10-year horizon fixed. Green = above today's $232.83; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.3% | $193 | $212 | $237 | $268 | $311 |
| 7.3% | $151 | $163 | $177 | $195 | $217 |
| 8.3% | $121 | $129 | $138 | $149 | $162 |
| 9.3% | $98.99 | $104 | $111 | $118 | $126 |
| 10.3% | $82.02 | $85.89 | $90.26 | $95.23 | $101 |
About Packaging Corporation of America
Packaging Corporation of America (PCA) is a U.S.-based enterprise specializing in the production and sale of containerboard and corrugated packaging materials. Its operations are organized into two primary divisions: Packaging and Paper. The Packaging division offers an extensive array of containerboard and corrugated solutions. These encompass conventional shipping containers designed for safeguarding and transporting manufactured goods, vibrant multi-color boxes and point-of-sale displays aimed at enhancing product merchandising in retail environments, and honeycomb protective packaging. This segment also provides specialized packaging for perishable goods like meat and fresh produce, processed foods, beverages, and a broad spectrum of other industrial and consumer products. Its corrugated offerings reach customers through a multi-channel approach, utilizing a dedicated direct sales and marketing team, independent brokers, and various distribution partners. Meanwhile, the Paper segment focuses on manufacturing and distributing a range of commodity and specialty papers. This includes communication papers, such as standard cut-size office paper, along with specialized printing and converting papers. Sales of its white paper products are managed directly by its internal sales and marketing organization. Tracing its origins back to 1867, Packaging Corporation of America maintains its corporate headquarters in Lake Forest, Illinois.
- Sector
- Consumer Cyclical
- Industry
- Packaging & Containers
- CEO
- Mark W. Kowlzan