Corrugated Packaging Survey: Optimistic On Price
January 15, 2010 1:52 PM
Longbow Research’s survey of the corrugated packaging industry for late December 2009 and early January 2010 reinforces the positive trends highlighted in the last survey. Key players are convinced that the price increase will be sustained.
Demand was high in December due to orders from existing clients facing low inventories, and pre-buying in anticipation of the price hike. Most players expect the container board price hike to be passed on to boxes.
The top picks of the survey are Temple-Inland (NYSE: TIN), given its earnings sensitivity to the economy and its focus on internal return-enhancing initiatives. Rock-Tenn (NYSE: RKT) is another pick due to its product portfolio, cost advantages and growth strategy. The price targets for Temple-Inland and Rock-Tenn are $25 and $61 respectively.
