Shares of Smurfit Westrock PLC (NYSE: SW) reached a new 52-week low on Thursday, dropping to $36.77 before settling at $36.99. This decline follows the company’s disappointing earnings report, where it reported earnings per share of $0.58, falling short of analyst expectations of $0.68 by $0.10. The stock saw a trading volume of 366,669 shares, a significant decrease from its previous close of $37.84.
Despite the earnings miss, Smurfit Westrock reported a revenue of $8 billion for the quarter, surpassing analysts’ forecasts of $7.89 billion. The company noted a year-over-year revenue increase of 4.3%, although its net margin was reported at 2.40%, and return on equity stood at 6.21%.
Dividend Announcement and Analyst Ratings
In addition to the earnings announcement, Smurfit Westrock revealed a quarterly dividend of $0.4308, set to be paid on December 18, 2024. Shareholders of record as of November 14, 2024 will be eligible for this payout, which translates to an annualized dividend of $1.72 and a yield of 4.8%. The company’s payout ratio, however, is notably high at 260.61%.
Wall Street analysts have varied opinions on the stock. Following the earnings report, Morgan Stanley adjusted its price target for Smurfit Westrock from $51.00 to $53.00, maintaining an “overweight” rating. Meanwhile, Royal Bank of Canada lowered its price target from $55.00 to $54.00 while keeping an “outperform” rating. Notably, Seaport Res Ptn upgraded its rating from “hold” to “strong-buy.” Overall, one analyst rated the stock as a Strong Buy, ten as Buy, and one as Hold, leading to a consensus rating of “Buy” with an average target price of $57.00, according to MarketBeat.
Institutional Trading Activity
Significant movements in institutional trading have also been observed. Nuveen LLC acquired a new stake in Smurfit Westrock valued at approximately $1.05 billion in the first quarter, while Norges Bank purchased a stake worth about $749.73 million in the second quarter. Additionally, Orbis Allan Gray Ltd increased its holdings by 81.9%, now owning over 18 million shares valued at $793.98 million after acquiring an additional 8.29 million shares.
Other notable investors include Ruffer LLP and Pacer Advisors Inc., the latter of which grew its holdings by an astonishing 4,580.7% in the third quarter. These institutional investors collectively own approximately 83.38% of Smurfit Westrock’s stock.
Despite the recent downturn, Smurfit Westrock maintains a current ratio of 1.48, a quick ratio of 0.95, and a debt-to-equity ratio of 0.72. The company’s market capitalization stands at $18.83 billion, with a price-to-earnings ratio of 25.21 and a beta of 1.09.
Smurfit Westrock PLC, along with its subsidiaries, operates in the manufacturing, distribution, and sale of containerboard, corrugated containers, and various paper-based packaging products both in Ireland and internationally. The company produces containerboard that is converted into corrugated containers or sold to third parties, and it also manufactures other types of paper products, including consumer packaging board and paper sacks.
