Pactiv Evergreen upgraded to Buy from Neutral at Citi

Citi upgraded Pactiv Evergreen to Buy from Neutral with a price target of $16, up from $10. The firm updated estimates and most/least preferred stock rankings as part of its 2024 packaging outlook, upgrading Pactiv Evergreen (PTVE) to Buy and downgrading O-I Glass (OI), Avery Dennison (AVY) and Silgan Holdings (SLGN) to Neutral following the Q4 stock moves. Packagers meaningfully underperformed in 2023 as extended destocking and consumer trade-down hit volumes, driving estimates lower throughout the year, the analyst tells investors in a research note. Positively, Citi says, the stocks enter 2024 with easy volume compares, cost-out benefits, and some company-specific catalysts. Furthermore, packaging stocks typically outperform in periods of decelerating inflation, contends the firm. Conversely, packager pricing power will be tested as consumer goods companies push for givebacks, and some valuations look fair following the Q4 stock run.