Packaging and paper equities have retraced earlier gains after new military activity in Iran surfaced in late February, with the group off roughly 12% since that period and erasing prior year-to-date appreciation of about 11% versus a flat market. In response to heightened geopolitical risk and a spike in oil-sensitive input costs, Bank of America has reduced earnings estimates across the sector to account for steeper freight, energy and chemical expenses.
Analysts at the bank noted that much of the downside from demand and margin risk has already been reflected in share prices following the pullback, but with uncertainty elevated and the prospect of further reversals, the research team is concentrating on what it views as the most compelling stock ideas within the group.
Packaging Corporation of America (PKG)
Bank of America trimmed 2026 estimates for Packaging Corporation of America by approximately $80 million to reflect the influence of higher oil prices, while highlighting the company’s energy-efficiency measures as partly offsetting those pressures. The firm moved its 2026 and 2027 earnings-per-share estimates to $9.90 and $11.80 from prior forecasts of $10.65 and $12.90, respectively.
The price objective on PKG was lowered to $241 from $270, and the price-to-earnings multiple applied by the bank was adjusted to 19 times from 20 times. Despite those reductions, the research team retained a Buy rating, citing what it views as durable pricing across paper and containerboard products and steady containerboard volumes. Free cash flow projections were modestly increased to $1.1 billion from a $1 billion normalized baseline.
Within the containerboard segment, estimates were pressured by an unexpected $20-per-ton decrease in the February price index, though that move was followed by a $40-per-ton increase in March that offset the earlier decline.
Ball Corporation (BALL)
Bank of America flagged Ball Corporation’s exposure to coatings inflation until next year’s producer price index adjusters are implemented. The research team also estimated a $5 million to $10 million earnings headwind stemming from a stronger U.S. dollar since the company reported fourth-quarter results.
As a result, the bank lowered 2026 estimates by more than $30 million, adjusting its 2026 and 2027 EPS forecasts to $3.90 and $4.45 from previous figures of $3.98 and $4.65. The price objective for Ball was moved to $70, and the Buy rating rests on expectations for improved relative volume trends into 2026 and the bank’s assessment that the metal supply chain, while potentially tighter, remains manageable.
Ball reported fourth-quarter 2025 operating earnings per share of $0.91, above estimates and supported by a 6% increase in volume. Following those results, Raymond James upgraded the stock to Outperform, and other firms including RBC Capital and Truist Securities raised their price targets.
Silgan Holdings (SLGN)
Silgan’s principal exposure, according to Bank of America, is resin cost inflation; the company’s energy costs are largely hedged and coating costs are treated as pass-throughs. To reflect resin-driven pressure, the bank trimmed 2026 estimates by $15 million to $20 million, moving 2026 and 2027 EPS estimates to $3.65 and $3.95 from prior levels of $3.85 and $4.20.
The price objective was reduced to $52 from $55. The Buy recommendation is grounded in the view that Silgan can remain reasonably close to its guidance range of $3.70 to $3.90 despite headwinds emanating from the Middle East. Silgan disclosed fourth-quarter 2025 results that beat both earnings and revenue expectations, increased its quarterly dividend by 5%, and is reportedly exploring a potential acquisition in the medical packaging segment.
Sonoco Products (SON)
Sonoco is exposed to unhedged European energy purchases that Bank of America estimates represent roughly 4% of the company’s cost of goods sold. The bank cut 2026 estimates by about $25 million, revising 2026 and 2027 EPS to $5.90 and $6.55 from previous forecasts of $6.05 and $6.70. The price objective was nudged to $67 from $68.
Despite the adjustments, the bank retained a Buy rating on Sonoco, pointing to what it views as attractive valuation alongside expected pricing actions and incremental margin benefits in paperboard businesses. Sonoco reported first-quarter 2026 earnings per share of $1.20, in line with analyst forecasts, while revenue of $1.68 billion missed expectations. Separately, BofA Securities lowered its price target on the company to $65.
Across the names highlighted, Bank of America’s approach emphasizes companies with clearer ability to pass through input-cost increases, stronger volume trajectories or advantageous supply-chain positions. The research team’s recommendations reflect a calibrated view that acknowledges immediate cost pressures driven by oil and currency moves while favoring firms where pricing power, operational discipline and balance-sheet strength can help preserve margins.