Shares of Smurfit Westrock PLC (NYSE:SW) fell to a new 52-week low on Thursday, trading as low as $36.77 before closing at $36.99. This decline followed the company’s disappointing earnings announcement, which revealed earnings per share of $0.58 for the latest quarter. This figure missed the consensus estimate of $0.68 by $0.10.
Despite the earnings shortfall, Smurfit Westrock reported a revenue of $8 billion, exceeding analysts’ expectations of $7.89 billion. The company’s revenue grew by 4.3% compared to the same period last year. The firm’s net margin stood at 2.40%, with a return on equity of 6.21%.
Dividend Announcement and Market Reactions
In conjunction with the earnings report, Smurfit Westrock announced a quarterly dividend of $0.4308, set to be distributed on December 18, 2023. Shareholders of record on November 14, 2023 will receive this dividend, which translates to an annualized dividend of $1.72 and a yield of 4.8%. The company’s payout ratio is notably high at 260.61%.
Wall Street analysts have shown varied perspectives on the stock. Morgan Stanley raised its price target to $53.00, maintaining an “overweight” rating. Conversely, Royal Bank of Canada lowered its target from $55.00 to $54.00, while also affirming an “outperform” rating. Additionally, Seaport Res Ptn upgraded the stock from “hold” to “strong-buy,” and UBS Group initiated coverage with a “buy” rating and a target price of $60.00. The consensus rating for Smurfit Westrock is currently “Buy,” with an average target price of $57.00.
Institutional Trading Activity
Recent trading activity has seen significant movement from institutional investors. Nuveen LLC acquired a new stake valued at approximately $1.05 billion in the first quarter, while Norges Bank purchased shares worth about $749.7 million in the second quarter. Additionally, Orbis Allan Gray Ltd increased its holdings by 81.9%, now owning over 18.4 million shares valued at nearly $794 million.
Hedge funds and other institutional investors now hold 83.38% of Smurfit Westrock’s stock, indicating strong institutional confidence despite recent price fluctuations.
The company currently has a market capitalization of $18.83 billion, a price-to-earnings (P/E) ratio of 25.21, and a beta of 1.09. Its liquidity ratios include a current ratio of 1.48 and a quick ratio of 0.95.
As Smurfit Westrock continues to navigate the challenges posed by market conditions and investor expectations, its next steps will be closely monitored by analysts and shareholders alike. The company remains a key player in the manufacturing and distribution of containerboard and paper-based packaging products, both in Ireland and internationally.
