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Fly News Breaks for December 26, 2019
Dec 26, 2019 | 08:03 EDT
Stephens analyst Mark Connelly said his recent industry talks suggest an emerging buy-side consensus for around a $30 per ton containerboard price cut coming in early 2020, though this would mean that either the market is assuming that International Paper (IP) and WestRock (WRK) will allow inventories to balloon again or that the market assumes that RISI will cut prices simply because demand is weaker and "will ignore the reality of supply and demand." While he thinks the former seems "quite unlikely," Connelly notes that the latter scenario "has happened before." The analyst, who concluded his industry note by stating "We can't think of a time in the past two decades when returns and discipline were so strong, and confidence in the industry was so weak," has Equal Weight ratings on shares of both IP and WestRock.