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July 22, 2010
Dear Friend,
Attached is an update
of Packaging Corp (PKG). We were surprised at the
traction of price hikes reflected in their second
quarter earnings. Previous attempts by containerboard
companies to implement price hikes over the last few
years have been met with push backs from customers and
generally led to larger discounts offsetting higher
prices. Going forward we expect to see elevated pricing
for the remainder of 2010 with slightly lower average
pricing in 2011. We continue to rate PKG Neutral with a
$24 price target.
Faithfully,
Joseph Reagor
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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