) reached a new 52-week high of $105.97 on June 14, higher than
its previous high of $104.09.
Rock-Tenn has delivered a robust one-year return of about 97% and
a healthy year-to-date return of about 52%, outperforming the
S&P 500. Average volume of shares traded over the last three
months was roughly 728K.
The Norcross, Ga.-based paperboard and packaging company has
delivered three positive earnings surprises over the past four
quarters with an average surprise of 2.47%. Rock-Tenn has a
market cap of $7.5 billion and a long-term expected earnings
growth of 15.6%.
Shares of Rock-Tenn are ascending following its second-quarter
fiscal 2013 results reported on Apr 23. The company reported
earnings per share of $1.12, up 15% year over year, driven by
strong operating performance. It was well ahead of the
Zacks Consensus Estimate of $1.02.
Total revenue improved 2% year over year to $2.325 billion, yet
missed the Zacks Consensus Estimate of $2.355 billion. The modest
growth in top line was driven by increased sales in the
Corrugated Packaging segment, somewhat offset by lower sales in
the Consumer Packaging and Recycling segments.
For fiscal 2013, the company raised its cash flow guidance to a
new range of $10 to $10.50 per share from its previous range of
$9.50 to $9.75 per share, indicating increased demand for folding
carton and paper.
On Apr 26, Rock-Tenn hiked its quarterly dividend by 33% from
22.5 cents per share to 30 cents per share. The mid-year increase
in dividend is backed by growing free cash flow generation and
long-term profitability of its business.
Moreover, Rock-Tenn's investment in box plants, installation of
new standard corrugated box operating system and increase in
domestic and export pricing will help to improve its
In addition, Standard & Poor's has maintained a positive
outlook on Rock-Tenn indicating that its corporate credit rating
may improve from BBB- to BBB over the near term. Moody's has
maintained its Ba1 rating with a stable outlook.
RockTenn currently retains a short-term Zacks Rank #3 (Hold).
Other Stocks to Consider
Other stocks with favorable Zacks Rank in the same industry are
KapStone Paper and Packaging Corporation
Resolute Forest Products Inc.
PH Glatfelter Co.
). While KapStone Paper and Resolute Forest carry a Zacks Rank #1
(Strong Buy), PH Glatfelter holds a Zacks Rank #2 (Buy).
GLATFELTER (GLT): Free Stock Analysis Report
KAPSTONE PAPER (KS): Free Stock Analysis
RESOLUTE FOREST (RFP): Free Stock Analysis
ROCK-TENN CO (RKT): Free Stock Analysis
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