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WestRock: Take Advantage Of The Cyclicality And Potential Turnaround

Mar. 28, 2023 7:00 AM ETWestRock Company (WRK)11 Comments
Andre Geraldes profile picture
Andre Geraldes


  • The paper industry is highly cyclical, and it's now experiencing a downturn.
  • WestRock is one of the largest players in the industry, heavily dependent on the US market. Recent performance has been below expectations.
  • Management still hasn't had enough time to prove they can improve, although there are promising signs.
  • Very cash-generative business, they should still be able to deliver around $1B in FCF in a lousy year. The dividend is well covered.

Paper Tubes Like a Graph

Mehmet Hilmi Barcin/E+ via Getty Images

WestRock (NYSE:WRK) can, in my opinion, fill both categories from Peter Lynch's approach to stocks by being both a turnaround and a cyclical one. While I fear the timing could be on the early side, the company

Westrock's Structure

Westrock's Value Chain (Westrock Investor Presentation)

Data by YCharts

Data by YCharts

Producer Price Index by Commodity: Pulp, Paper, and Allied Products: Packaging and Industrial Converting Paper

PPI by Commodity: Pulp, Paper, and Allied Products: Packaging and Industrial Converting Paper (FRED Economic Data)

Pay at Risk

Pay at Risk (Westrock 2022 Annual Report)

CEO Compensation

CEO Compensation (Simply Wallstreet)

Data by YCharts

Data by YCharts

Value Proposition

Value Proposition (Westrock Investor Presentation)

This article was written by

Andre Geraldes profile picture
A passionate Portuguese traversing the value investment world.Master in finance and currently undergoing a PG in financial analysis. Been actively investing in the stock market since 2019.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of WRK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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