Is Packaging Corporation of America overvalued or undervalued?

As of 23 July 2025, the valuation grade for Packaging Corporation of America has moved from fair to attractive, indicating a more favorable outlook for the stock. The company appears to be undervalued based on its current metrics, with a P/E ratio of 21, an EV to EBITDA of 10.99, and a PEG ratio of 1.16. In comparison to peers, International Paper Co. has a significantly higher P/E ratio of 52.31, while Amcor Plc shows a P/E of 22.17, suggesting that Packaging Corporation of America is priced more attractively relative to its competitors.
Despite some recent underperformance, particularly in the 1W and YTD returns, where it returned -1.41% and -4.96% compared to the S&P 500's 1.05% and 12.22%, respectively, the company's strong long-term performance is notable, with a 3Y return of 81.21% against the S&P 500's 70.41%. This indicates that while there may be short-term volatility, the company's fundamentals suggest it is a solid investment opportunity.