Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Avery Dennison (NYSE: AVY) and its peers.
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 8 industrial packaging stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12.3% since the latest earnings results.
Avery Dennison (NYSE: AVY)
Founded as Kum Kleen Products, Avery Dennison (NYSE: AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Avery Dennison reported revenues of $2.22 billion, flat year on year. This print fell short of analysts’ expectations by 0.9%. Overall, it was a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.
“We delivered a solid second quarter, with earnings above expectations in a dynamic environment, reflecting the strength of our overall portfolio,” said Deon Stander, president and CEO.
Avery Dennison delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 11.4% since reporting and currently trades at $158.67.
Read our full report on Avery Dennison here, it’s free for active Edge members.
Best Q2: Sealed Air (NYSE: SEE)
Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.
Sealed Air reported revenues of $1.34 billion, flat year on year, outperforming analysts’ expectations by 1.9%. The business had an exceptional quarter with an impressive beat of analysts’ sales volume and EBITDA estimates.
Sealed Air delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 14.5% since reporting. It currently trades at $33.21.
Is now the time to buy Sealed Air? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: International Paper (NYSE: IP)
Established in 1898, International Paper (NYSE: IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
International Paper reported revenues of $6.77 billion, up 42.9% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a softer quarter as it posted and a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 14.9% since the results and currently trades at $45.69.
Read our full analysis of International Paper’s results here.
Ball (NYSE: BALL)
Started with a $200 loan in 1880, Ball (NYSE: BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Ball reported revenues of $3.34 billion, up 12.8% year on year. This print topped analysts’ expectations by 7%. It was an exceptional quarter as it also produced an impressive beat of analysts’ organic revenue estimates.
Ball scored the biggest analyst estimates beat among its peers. The stock is down 18.5% since reporting and currently trades at $46.96.
Read our full, actionable report on Ball here, it’s free for active Edge members.
Graphic Packaging Holding (NYSE: GPK)
Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.
Graphic Packaging Holding reported revenues of $2.20 billion, down 1.5% year on year. This number surpassed analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ sales volume estimates and a solid beat of analysts’ EBITDA estimates.
Graphic Packaging Holding had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is down 24.3% since reporting and currently trades at $17.50.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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