Packaging, Forest Products Face Lackluster Demand, Weak Volumes, BofA Says

Packaging and forest products companies face lackluster demand and weak volumes outside beverage cans and selected specialty markets, BofA Securities analysts said in a Tuesday note. Analysts said that while inflation headwinds are expected to fade in the second half of the year, assuming a renewed ceasefire in the Middle East, foreign exchange could become an earnings risk. BofA said that beverage cans remain its preferred subsector, driven by stronger demand, improving aluminum economics, innovation, and the World Cup. Analysts said they are cautious on glass and paper, where volume weakness and potential operating-rate pressures could weigh on outlooks. BofA upgraded AptarGroup's (ATR) rating to buy from neutral, and raised its price objective to $173 from $148. It downgraded O-I Glass (OI) to underperform from buy, Greif (GEF) to underperform from neutral, and International Paper (IP) and Sylvamo (SLVM) to neutral from buy. BofA also resumed coverage of Graphic Packaging (GPK) with a neutral rating and a $12 price objective. Analysts increased the price objective on Ardagh Metal Packaging (AMBP) to $4.70 from $4; Amcor (AMCR) to $51 from $48; Avery Dennison (AVY) to.