On Jul 20, Zacks Investment Research upgraded
), the Norcross, Ga.-based paperboard and packaging company, to a
Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Rock-Tenn is expected to report an earnings beat in fiscal third
quarter with an earnings ESP of +1.81%, following an 9.8%
earnings surprise in the previous quarter. The third-quarter
results are scheduled to be announced on Jul 23. Shares of
Rock-Tenn reached a new 52-week high of $108.97 on Jul 11,
exceeding the previous high of $108.
In the second quarter, Rock-Tenn reported earnings per share of
$1.12, up 15% year over year driven by strong operating
Rock-Tenn raised its cash flow guidance to a new range of $10 to
$10.50 per share, indicating increased demand for folding carton
and paper for fiscal 2013. The company also hiked its
quarterly dividend by 33% from 22.5 cents per share to 30 cents
Rock-Tenn expects initial cash flow for fiscal 2014 in the band
of $10.50 to $11.50 per share, based on expected recovery in
containerboard and related box prices.
RockTenn's strong earnings growth reflects continued improvements
in its operating performance and higher containerboard and box
pricing. 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
Following the second quarter results, over the past 90 days, the
Zacks Consensus Estimate for Rock-Tenn has gone up 2% to $6.53,
reflecting a 45.85% year-over-year increase. The Zacks Consensus
Estimate for 2014 edged up 2% to $9.15.
Other Stocks to Consider
Other stocks with favorable Zacks Rank in the same industry are
KapStone Paper and Packaging Corporation
) with a Zacks Rank #1 (Strong Buy), and
Orchids Paper Products Company
Resolute Forest Products Inc.
), both carrying a Zacks Rank #2 (Buy).
KAPSTONE PAPER (KS): Free Stock Analysis
RESOLUTE FOREST (RFP): Free Stock Analysis
ROCK-TENN CO (RKT): Free Stock Analysis
ORCHIDS PAPER (TIS): Free Stock Analysis
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