In this article, we will navigate through the global packaging market while taking a look at the 10 best packaging stocks to buy according to analysts.
An Overview of the Global Packaging Market
According to a report by Mordor Intelligence, the packaging market size is estimated at $1.14 trillion in 2024 and is expected to grow to $1.38 trillion by 2029, growing at a compound annual growth rate of 3.89% during the forecast period (2024-2029).
Region-wise, Asia Pacific is the fastest-growing region in the packaging market, with plastic packaging being widely utilized in the region. India and China’s food and beverage markets are contributing to this utilization. Japan is another major consumer of paper-based products in diverse sectors.
Market trends reflect that paper and paperboard packaging products are to witness the highest growth. There has been an increasing demand for eco-friendly packaging with minimal environmental footprint. In this regard, paper-based solutions such as bags, pouches, and cartons, have driven a surge in sustainable packaging adoption. The demand for eco-friendly paper packaging solutions is also coming from the environmental regulations on non-biodegradable and non-recyclable packaging solutions as well as the rising trend of online retail.
The perception of customers regarding paper and paperboard packaging being more environmentally friendly than plastic packaging is also shaping this demand. Gen Z is especially more inclined towards the rising sustainability trend. Oisin Hanrahan, the CEO and co-founder of Keychain, described the prevalent Gen Z consumer preferences by stating:
“Gen Z has a unique preference for conscious consumption when compared to any generation, which provides a huge opportunity for brands to win them over with sustainable ingredients, packaging, and practices”
Is Generative AI the Future of the Packaging Industry?
As reported by McKinsey & Company, the packaging industry has historically been behind other sectors in terms of adopting new technologies such as traditional AI and machine learning. However, a recent survey of over 200 paper and packaging executives across substrates and geographies revealed that executives recognize the potential of generative AI to drive business value. While approximately 95% of the respondents believed their companies should invest in gen AI, 77% said that their companies have moderate to strong intentions to use the technology in the near future.
In regards to the current adoption of gen AI, 24% of respondents reported that they either have launched or are developing generative AI tools or solutions in their area of work. A majority of those who had implemented gen AI saw its generated impacts as meeting or exceeding expectations. Survey respondents also expect generative AI to enable revenue growth and cost savings. They believed that opportunities to use generative AI are present across the packaging and paper value chain. The technology can also help generate new ideas through intellectual property and patent analytics, give customer analysis, and create customization options. Gen AI is expected to have the most profound impact on the commercial side of the industry for instance increasing sales team productivity, optimizing marketing spend, and improving pricing capabilities for companies.
While generative AI has an obvious advantage over traditional Artificial Intelligence since it can deal with messier data and offers easier adoption because of its accessible user interface, players in the paper and packaging industry are still subject to challenges. These challenges include limited access to data and to a modern data tech stack, gen AI’s use causing intellectual property or privacy concerns, limited understanding of use cases to drive value in commercial activities, associated costs, and resistance to change among others.
With that being said, let’s move to the 10 best packaging stocks to buy according to analysts.
Our Methodology:
In order to compile a list of the 10 best packaging stocks to buy according to analysts, we first used a stock screener to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest average upside potential. The 10 best packaging stocks to buy according to analysts have been arranged in ascending order of their average upside potential, as of November 1.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Packaging Stocks to Buy According to Analysts
10. Smurfit Westrock Plc (NYSE:SW)
Average Upside Potential: 8.38%
Number of Hedge Fund Holders: NA
Smurfit Westrock Plc (NYSE:SW) serves as a global leader in sustainable paper and packaging. The firm operates in 40 countries with more than 500 packaging converting operations and 62 paper mills. Its portfolio of innovative packaging solutions is broad and ranges from corrugated and consumer packaging to Bag-in-Box packaging and point-of-sale displays.
Smurfit has an unparalleled scale and global reach. The firm positions itself uniquely to cater to evolving customer needs through the breadth of its paper-based packaging offerings as well as its suite of value-added services. It also has a deep understanding of the unique challenges each sector faces by working with more than 100,000 customers across 40 countries in every industry. Smurfit has been undergoing strategic asset optimization. Over the past 22 months, the firm has closed 10 corrugated packaging facilities, 13 consumer packaging facilities, and two mills, while it divested four mills in North America. Simultaneously, it has closed one mill and six packaging facilities in Europe, MEA &APAC.
For the third quarter ended September 30, Smurfit Westrock Plc (NYSE:SW) recorded net sales of approximately $7.7 billion. Net sales increased year-over-year, driven by the positive impact from acquisitions of $4,693 million, of which $4,684 million was related to the acquisition of WestRock and a net positive volume impact of $98 million mainly driven by a rise in corrugated volumes. The net loss for the quarter was $150 million which was primarily because of transaction-related expenses and purchase accounting adjustments totaling approximately $500 million.
The firm is continuing its focus on asset optimization and has set itself to become the go-to sustainable packaging partner of choice with an unrivaled scale, geographic reach, and product portfolio.
9. AptarGroup, Inc. (NYSE:ATR)
Average Upside Potential: 11.30%
Number of Hedge Fund Holders: 28
AptarGroup, Inc. (NYSE:ATR) is a global manufacturer of consumer dispensing packaging and drug delivery devices. It has over 13,000 employees in 20 countries across the pharmaceutical, beauty, food, beverage, personal care, and home industries. The company operates through Aptar Pharma, Aptar Beauty, and Aptar Closures segments. Aptar is headquartered in Crystal Lake, Illinois.
Aptar creates dosing, dispensing, and protective packaging solutions for the leading brands globally. The firm uses insights, design, engineering, and science to create innovative packaging technologies that build value for its customers. It brings innovations to the market that convert non-dispensing packaging into breakthrough product-dispensing systems.
While Aptar Pharma is the go-to drug delivery expert, Aptar Beauty creates added-value beauty packaging and dispensing solutions in fragrance, color cosmetics, skincare, and personal care, with advanced capabilities in sustainable and omnichannel packaging. It serves as a leading partner with over 75 years of experience in developing high-quality, industry-impacting dispensing and packaging solutions. It leverages its global network of technology expertise and connection to attractive markets and consumer insights to create leading-edge packaging solutions. Meanwhile, Aptar Closures enhances lives and markets with sustainable packaging solutions that drive growth, brand loyalty, and environmental goals across multiple industries.
Recently, AptarGroup, Inc. (NYSE:ATR) recorded strong third-quarter results, with a net income of $100 million, up 19% year-over-year. The segment-wise performance was robust with the Pharma segment delivering reported sales growth of 8% and core sales growth of 7% with continued demand for proprietary drug delivery systems, and the Aptar Closures segment witnessing sales increase 3% from the prior-year quarter. On the contrary, the Aptar Beauty segment’s reported sales decreased 7% although the segment saw growth in the personal care and home care markets.
AptarGroup, Inc. (NYSE:ATR) is one of the best packaging stocks to buy now according to analysts. The firm’s year-to-date financials remain strong with Aptar achieving double-digit earnings per share growth over the prior year period and is positioned to achieve double-digit adjusted EPS growth for the full year. Free cash flow has increased to $255 million compared to $124 million in the prior year.
8. Graphic Packaging Holding Company (NYSE:GPK)
Average Upside Potential: 12.58%
Number of Hedge Fund Holders: 27
Graphic Packaging Holding Company (NYSE:GPK) is a leading sustainable consumer packaging company. The company’s packaging solutions are made primarily with renewable or recycled materials. Graphic Packaging Holding Company is headquartered in Atlanta, Georgia.
GPK has a global network of design and manufacturing facilities and serves the most widely recognized global brands in food, beverage, food service, household, and other consumer products. The company boasts a diversified portfolio that moves with the consumer to deliver consistency and growth. It has also pursued key acquisitions that have expanded design and execution capabilities. Also, GPK is a leader in innovation with its focus on reducing the environmental footprint of consumer packaging.
The firm’s recent third-quarter highlights include positive packaging volume growth and innovation sales growth of $54 million. Some developments in the quarter include the launch of new paperboard cup and container innovations for major food service customers as well as the first-ever round Boardio paperboard canister for a leading collagen-protein brand.
Graphic Packaging Holding Company (NYSE:GPK) is a global leader in sustainable consumer packaging. With an unmatched product offering in depth and breadth, well-known global consumer brands as customers, and the rising demand for sustainable packaging, GPK is an attractive packaging stock to consider. The stock has an average upside of 12.58%, as of November 1.
7. Silgan Holdings Inc. (NYSE:SLGN)
Average Upside Potential: 14.25%
Number of Hedge Fund Holders: 23
Silgan Holdings Inc. (NYSE:SLGN) is a leading global supplier of sustainable rigid packaging solutions for consumer goods products. Its primary product lines are dispensing and specialty closures, metal containers, and custom containers. The firm operates 107 manufacturing facilities on four continents, with over 14,400 employees. It was founded in 1987 by Phil Silver and Greg Horrigan.
Supported by its leading innovation and service model, the firm serves as the dispensing partner of choice to the most iconic global brands. Furthermore, Silgan has a history of growing through targeted acquisitions and has completed forty acquisitions to date thereby deepening its product offering and expanding its geographic reach.
The firm’s segments remain robust as reflected in the Q3 results. While the global dispensing business witnessed another consecutive quarter of double-digit growth in dispensing products, the Metal Containers business delivered high single-digit growth in pet food and extended its decades-long relationship with the firm’s largest Metal Containers customer. Furthermore, better market demand, strong operating performance, and the commercialization of new business awards benefitted the Custom Containers business.
Silgan Holdings Inc. (NYSE:SLGN) also completed the acquisition of Weener Packaging in the quarter, expanding the breadth and reach of its best-in-class global dispensing business. Given the momentum across the business, the firm anticipates significant earnings growth in 2025 and beyond. With an average upside potential of 14.25%, Silgan Holdings Inc. (NYSE:SLGN) is one of the best packaging stocks to buy according to analysts.
6. Crown Holdings, Inc. (NYSE:CCK)
Average Upside Potential: 16.83%
Number of Hedge Fund Holders: 48
Crown Holdings, Inc. (NYSE:CCK) is a leading supplier of beverage packaging, food packaging, aerosol packaging, metal closures, promotional packaging, and transit packaging products. The company was founded in 1892 and currently has operations in 39 countries employing over 25,000 people.
CCK ensures geographical diversity by serving customers in every region. The company is in a unique position to support customers in surging beverage cans markets in the Americas and Southeast Asia and historically strong geographies of Europe, the Middle East, and North Africa. Aluminum beverage cans which represent over 60% of the firm’s business are a sustainable packaging format experiencing historic levels of growth globally. Beverage remains CCK’s core competency focus driving a major portion of sales. In this regard, can volume growth is being driven by new products, with approximately 80% of new products in the US and Canada being introduced in cans.
During the third quarter, Crown Holdings, Inc. (NYSE:CCK) recorded net sales of $3,074 million, up from $3,069 million in the prior year quarter. Segment income was up 10% year-over-year. This was driven by improved results in global beverage operations, partially offset by the impact of lower volumes in Transit Packaging and the beverage can equipment business. Global beverage shipments improved 5% during the quarter. Brazil, Mexico, the United States, and Europe all witnessed increases of 5% or greater.
As a leading global diversified packaging company with a positive trajectory of key markets, Crown Holdings, Inc. (NYSE:CCK) is poised to grow. Furthermore, the firm’s diverse portfolio of global packaging businesses helps generate significant operating cash flow. As of Q2, the stock is held by 48 hedge funds.
5. Avery Dennison Corporation (NYSE:AVY)
Average Upside Potential: 17.58%
Number of Hedge Fund Holders: 33
Avery Dennison Corporation (NYSE:AVY) is a leader in supporting retail brands through custom packaging and product labels. The firm has operations in more than 50 countries with approximately 35,000 employees. Avery Dennison Corporation operates through segments namely Solutions Group and Materials Group.
The firm leverages strong competitive advantages including a global scale, innovative materials science capabilities and process technology, proven Intelligent Labels capability, as well as operational and commercial excellence. Furthermore, it has broad exposure to diverse markets, with increasing portfolio strength.
Avery Dennison Corporation (NYSE:AVY) closed the third quarter with strong earnings growth, driven by higher volume and productivity gains. The Materials Group saw its reported sales increase 3% to $1.5 billion while the Solutions Group witnessed reported sales increase 7% to $686 million.
With strong competitive advantages and a leading position in its businesses, Avery Dennison Corporation (NYSE:AVY) is in a good position to drive superior value creation for all its stakeholders.
4. Karat Packaging Inc. (NASDAQ:KRT)
Average Upside Potential: 18.52%
Number of Hedge Fund Holders: 7
Karat Packaging Inc. (NASDAQ:KRT) manufactures and distributes single-use disposable products used in various restaurant and food service settings. The company’s products include food packaging, containers, tableware, cups, lids, cutlery, and straws. Additionally, KRT distributes certain specialty food and beverage products and offers customized solutions, including new product development and design, printing, and logistics services.
Karat’s history reflects that it has been a consistently growing manufacturer and distributor of disposable products for restaurants and the food service industry. The firm has numerous competitive strengths including being a one-stop shop supplier with broad product offerings, global sourcing capabilities, leadership in eco-friendly products, customized solutions as well as a diverse and growing blue-chip customer base. Since the growth of the food delivery and takeout market has highly increased the demand for disposable packaging, the market conditions are favorable.
For the second quarter, Karat Packaging Inc. (NASDAQ:KRT) posted net sales of $112.6 million as compared to $108.7 million in the prior year quarter. Despite the higher ocean freight costs which spiked in mid-May and were high through July, the firm’s gross margin remained steady. While KRT continues to expand its business pipeline, it faced issues during Q2 with the initiation of certain new orders taking longer, partly due to administrative set-up procedures at a number of the larger chain accounts and softer demand in certain categories.
Thus, Karat Packaging Inc. (NASDAQ:KRT) is a leading packaging company with a history of proven success, a bunch of competitive edges as aforementioned, and a positive market outlook. The firm also has the ability to continuously augment product offerings to cater to changing customer needs.
3. Sonoco Products Company (NYSE:SON)
Average Upside Potential: 19.00%
Number of Hedge Fund Holders: 32
Sonoco Products Company (NYSE:SON) is an integrated packaging company that helps define brand personalities. The firm was founded in 1899 and has served global customers for more than 124 years. Sonoco has over 300 facilities in 33 countries.
Sonoco operates as a global leader in high-value, sustainable packaging that serves some of the well-known brands across the world. The company’s portfolio is made up of leading products serving large, attractive end markets for consumer and industrial packaging. Additionally, Sonoco’s business remains highly diversified across offerings, substrate, customers, and geographies.
For the third quarter of 2024, Sonoco Products Company (NYSE:SON) reported GAAP net income of $51 million, adjusted EBITDA of $281 million, and diluted earnings per share of $0.51. The company was successful in generating productivity improvements of $39 million during the quarter. Consumer and Industrial volumes were also higher year-over-year. Additionally, SON entered into an agreement to acquire Eviosys and is on track to complete the acquisition in 2024’s fourth quarter.
Therefore, Sonoco Products Company (NYSE:SON) is leading the way in innovative packaging solutions as the world’s leading sustainable packaging provider across metal and fiber-based products. The firm’s consumer-focused solutions, robust industrial capabilities, and century-long expertise enable it to remain competitive in the packaging industry.
2. Pactiv Evergreen Inc. (NASDAQ:PTVE)
Average Upside Potential: 23.46%
Number of Hedge Fund Holders: 16
Pactiv Evergreen Inc. (NASDAQ:PTVE) is a leading manufacturer of fresh food and beverage packaging in North America. The firm’s products range from food containers, hot and cold cups, plates and bowls, lids, wraps, and cutlery to meat and poultry trays, egg cartons, and reclosable beverage cartons. PTVE supplies its products to full and quick-service restaurants, food and beverage producers, supermarkets, food service distributors, retailers, food packers, and processors.
PTVE serves as a powerhouse in the fresh food and beverage packaging industry with a large, well-invested manufacturing base and a hub-and-spoke distribution network. The firm has over 14,000 employees across more than 50 manufacturing facilities in North America. It has a broad portfolio encompassing over 14,000 individual products in fourteen different materials. The company is a trusted partner to leading global brands and creates innovative products used 5 billion times each week in the United States alone.
The second quarter marked a significant milestone in the transformational journey of PTVE as it announced an agreement to sell its Pine Bluff mill and Waynesville extrusion facility to Suzano, which will enable the firm to focus on its core North American converting operations. However, the overall second-quarter results were impacted by end-market weakness and temporary operational disruptions at Pine Bluff Mill. PTVE is also implementing Footprint Optimization strategic initiative to optimize its manufacturing and warehousing footprint. This move is expected to improve operating efficiency and result in meaningful cost savings beginning in 2025 and beyond.
Pactiv Evergreen Inc. (NASDAQ:PTVE) is another attractive packaging stock to buy according to analysts. The firm has a leading position in food and beverage packaging with broad material expertise and an extensive manufacturing and distribution network.
1. O-I Glass, Inc. (NYSE:OI)
Average Upside Potential: 43.50%
Number of Hedge Fund Holders: 27
O-I Glass, Inc. (NYSE:OI) serves as a global leader in glass packaging. The firm is one of the producers of the most sustainable packaging, the glass container. It was founded by the inventor of the automatic bottle-making machine, Michael J. Owens. The firm’s vision revolves around becoming the most innovative, sustainable, and chosen supplier of brand-building packaging solutions.
OI has innovated and transformed how glass packaging is made and sold for over 100 years. It serves some of the most trusted brands such as Nestlé, Unilever, Coca-Cola, PepsiCo, and Kraft Heinz among others. The firm boasts a privileged footprint across the Americas and the EU, with deep manufacturing and technical capabilities. Furthermore, long-term megatrends tend to favor glass which remains well-positioned to win in the new green economy. Glass is the preferred choice for premium and health-oriented products.
The third quarter performance of O-I Glass, Inc. (NYSE:OI) was not like the strong prior-year quarter. The firm believes that its 2024 performance doesn’t reflect what it can potentially deliver while results are expected to improve in 2025 and beyond for which the Fit to Win program is in place. The first phase of O-I’s Fit to Win initiative is being implemented and is expected to drive at least $300 million of annualized savings by 2027. OI intends to reduce central operating costs, shift accountability to local markets, as well as eliminate unprofitable and redundant capacity to increase network utilization and drive productivity.
In conclusion, the firm expects a solid recovery in 2025 driven by its Fit to Win initiative benefits. Apart from the increased competitiveness expected as a result of this program, the firm has strong customer relationships which depict its service-level capabilities as well as a bright future for Glass to benefit from. Thus, O-I Glass, Inc. (NYSE:OI) ranks among the best packaging stocks to buy according to analysts with its average upside potential of 43.50%.
While we acknowledge the potential of OI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than OI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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