DAVY VIEW

Historically, the packaging industry had poor pricing discipline, particularly in an uncertain macro environment. Commentary from both DS Smith and Smurfit Kappa Group (SKG), the two largest players in this market, suggests that discipline has improved. This, combined with structural growth in volumes, will result in lower longer-term earnings volatility. This should merit a re-rating in the valuation of the sector, which is currently being valued off an historical playbook.