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Packaging Corporation of America (PKG)
Intrinsic Value (DCF)
Current$221.96
→
Intrinsic$82.49
-63%
$49.09$82.49$146.00
Market implies 30% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $222, the market prices in continued strong cash flow growth (30%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $49 → Bull $146. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $102 | $114 | $126 | $139 |
| 10% | $66 | $74 | $82 | $92 |
| 12% | $46 | $52 | $58 | $65 |
| 14% | $33 | $38 | $43 | $49 |
Bull Case
- Bull case ($146) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($49) implies 78% downside at 6% growth, 12% discount
- Price reflects 30% growth expectations vs 8% historical — high bar to clear
- Trading 63% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$563.22M
Year 2$608.28M
Year 3$656.94M
Year 4$709.49M
Year 5$766.25M
Terminal$11.27B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$521.50MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.