By Peet Serfontein & Motheo Tlhagale
We initiate a long position. Our upside target is set at $49. We recommend a stop-loss at $36.
Smurfit WestRock plc, formed through the merger of Smurfit Kappa Group and WestRock Company, is a global leader in sustainable, fibre-based packaging solutions. Headquartered in Dublin and domiciled in Ireland, the company maintains a substantial presence in the United States, where WestRock was originally based. Smurfit WestRock serves a broad range of industries, including consumer goods, e-commerce, and food and beverage, through an extensive network of paper mills, packaging plants, and recycling facilities.
The merged entity emphasises circular economy practices and innovation in eco-friendly materials, aiming to unlock synergies in R&D, supply-chain integration, and market reach.
Technically, a trough in the Elliott wave theory presents a promising investment opportunity for the stock (see the insert on the main chart).
Additionally, a sharp price decline has pushed the stock below the lower Bollinger Band. This level often serves as dynamic support, and a price bounce may indicate easing selling pressure and renewed buying interest. If supported by stabilising or improving momentum indicators, this could signal the early stages of a bullish reversal.
The recent steep decline in price also supports the case for mean reversion. The sharp downward trajectory appears unsustainable and may reflect capitulation or panic-driven selling conditions that is often followed by a relief rally or stabilisation.
Fading downside momentum, evident in the MACD histogram, adds weight to the bullish case. Additionally, the recent sideways movement in the On-Balance Volume (OBV) indicator suggests selling pressure may be stabilising, supporting a potential shift in trend direction.
| Share Information | |
|---|---|
| Share Code | SW |
| Industry | Materials |
| Market Capital (USD) | 20.65 billion |
| One Year Total Return | -16.54% |
| Return Year-to-Date | -25.96% |
| Current Price (USD) | 39.56 |
| 52 Week High (USD) | 56.99 |
| 52 Week Low (USD) | 37.01 |
| Financial Year End | December |
| The price remains below the 200-day simple moving average (SMA), a traditionally bearish signal. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 0.82 | 2.98 | 3.70 | 4.18 |
| Growth (%) | 263.41 | 24.09 | 13.06 | |
| Dividend Per Share (USD) | 1.21 | 1.75 | 1.74 | 1.86 |
| Growth (%) | 44.46 | -0.46 | 6.61 | |
| Forward PE (times) | 13.28 | 10.70 | 9.46 | |
| Forward Dividend Yield (%) | 4.42 | 4.40 | 4.69 | |
| Triple-digit earnings growth is expected over FY25. The stock holds a Beta of 0.938, which indicates that it is slightly less volatile relative to the overall stock market. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | PANW US - Buy (Continue to hold) |
DECK US - Buy (Continue to hold) |
CTAS US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 173.55 | 109.15 | 205.84 |
| Current | 188.69 | 117.07 | 213.31 |
| Movement | +8.7% | +7.3% | +3.6% |
|
A recent trough in price continues to attract attention. Testing its 200-day SMA. Fading downside price momentum remains supportive.
Our profit target remains at $228 with a trailing stop-loss at $152. Exit the trade around 25 June 2025. |
A trough per the Elliott wave theory remains of interest. Remains below its 200-day simple SMA. Fading downside price momentum reinforces a bullish trade thesis.
Our profit target is maintained at $144, with a trailing stop-loss is established at the $102. Exit the trade around 24 June 2025. |
A bullish pennant pattern continues to attract attention. Remains just above its 200-day simple moving average. The start of upside price momentum is supportive.
Our profit target is maintained at $241, with a trailing stop-loss is established at the $193.50. Exit the trade around 25 June 2025. |
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