Zacks Industry Outlook Packaging Corporation of America, Amcor, AptarGroup and Sonoco Products

Industry Overview - The Zacks Containers - Paper and Packaging industry is experiencing weak demand due to lower consumer spending amid inflation, but pricing actions are helping to offset supply-chain disruptions and elevated costs [1][6] - The industry is expected to benefit from rising e-commerce activities and increasing demand for sustainable packaging options due to environmental concerns [1][11] Market Dynamics - The industry has seen volume declines as customers reduce inventory, impacting top-line performance [6][7] - Supply-chain disruptions and rising costs for materials, labor, and transportation have led companies to implement cost-reduction measures [7] - E-commerce accounted for over 19% of global retail sales in 2023, with revenues projected to reach $4,324 billion by 2025, growing at a CAGR of 8% from 2025 to 2029 [8][9] Demand Trends - The industry has significant exposure (over 60%) to consumer-oriented markets such as food, beverages, and healthcare, ensuring stable demand across economic cycles [10] - There is a growing preference for eco-friendly packaging materials, driven by increased consumer awareness of environmental issues [11] Industry Performance - The Zacks Containers - Paper and Packaging industry currently ranks 176 out of 248 Zacks industries, placing it in the bottom 29% [12][13] - Over the past year, the industry has gained 9.6%, underperforming the S&P 500's growth of 21.8% but outperforming the Industrial Products sector's 6.9% increase [14] Valuation Metrics - The industry is trading at a forward 12-month EV/EBITDA ratio of 17.97, compared to the S&P 500's 13.96 and the Industrial Products sector's 19.85 [15] Company Highlights - **Sonoco Products Company**: Benefiting from the acquisition of Ball Metalpack, implementing price actions to counter inflation, and expects to achieve an annual EBITDA of$ 1 billion by 2026 [16][18] - Packaging Corporation of America: Reported year-over-year growth in Q4 2024, driven by higher volumes and pricing, with strong demand expected to continue in 2025 [19][20] - Amcor plc: Focused on expanding capacity in high-growth segments and has entered a merger agreement with Berry Global Group, expected to yield $650 million in benefits [22][23] - AptarGroup: Achieved growth in Q4 2024, particularly in the pharma and closures segments, with a focus on innovative products and acquisitions to drive future growth [25][26]