Smurfit WestRock plc (SW)

Conclusion

Smurfit WestRock plc, headquartered in Dublin, makes containerboard, corrugated containers and other paper-based packaging for food and beverage, healthcare, consumer goods and other markets. At 44.19 USD on 2026-11-09, the market capitalisation is 23.2 billion USD.

The verdict is fair. The fair value band runs from 42.87 to 64.30 USD, with a midpoint of 53.59 USD and a margin of safety of 21.3% at today's price. The DCF gives 53.59 USD per share at a discount rate of 9.61%. The price-to-earnings ratio is 50.0 and EV/EBITDA is 5.5, but the ten-year medians for these multiples are not available because there is not enough price history to compute them. The reverse DCF implies revenue growth of 12.74% a year, against a five-year revenue CAGR of 29.59% actually delivered. Free cash flow per share, however, has fallen at a five-year CAGR of -8.67%.

The strongest numbers are net debt to EBITDA of 0.03, free cash flow conversion of 183.8% on a trailing basis, and a Piotroski score of 6 out of 9. The weakest are ROIC of 5.93% against a WACC of 9.55%, interest coverage of 1.88, and an Altman Z-score of 1.46 in the distress zone. Analysts have also cut the current-year earnings estimate by 27.4% over 90 days, and the company has missed earnings estimates in seven of the last eight quarters.

Financial health

Financial health is red, held back by a weak interest coverage of 1.88 and an Altman Z-score of 1.46, while low net debt to EBITDA of 0.03 and a current ratio of 1.48 support it. The quick ratio is 0.75 and debt to equity is 0.05, so leverage on the balance sheet is light. The Altman model was designed for manufacturers, and this company is one, so the distress reading applies more directly. Insolvency risk: low, about 0.4% by the estimate of the Ohlson model over one to two years. That low probability sits uneasily beside the weak coverage ratio, so the company's ability to service its interest costs from operating profit is the main thing to watch.

Earnings quality

Earnings quality is red, mainly because of the share count and the earnings record. Free cash flow conversion is 183.8% on a trailing basis and 82.3% over five years, and the accrual ratio is -6.06%, both supportive. Stock-based compensation is 0.33% of revenue, and free cash flow after it is 751 million USD. The share count has grown at a five-year CAGR of 15.94%, so dilution, not buybacks, has been the pattern. The Piotroski score is 6 out of 9. The Beneish M-score is not available. The company beat earnings estimates in only one of the last eight quarters, with an average surprise of -17.6%, and estimates for the current year have been revised down by 27.4% over 90 days.

Profitability

Profitability is red. Gross margin is 17.47% against a ten-year median of 27.06%, operating margin is 5.0% against 10.22%, and net margin is 1.52% against 5.35%. Margin stability over the period is 22.45%. ROIC is 5.93% against a WACC of 9.55%, so the company is earning below its cost of capital; the given ROIC minus WACC value is -3.61%. The five-year median ROIC is 9.96%. Return on equity is 2.58%, which is low despite an equity multiplier of 2.46. The DuPont split shows a net margin of 2.24% and an asset turnover of 0.69 (2025 annual figures), so the equity multiplier is not inflating the return. The limit is thin margins, not leverage.

Growth

Growth is yellow, with revenue growth strong but earnings declining. Revenue has a compound growth rate of 35.2% over three years, 29.59% over five years and 14.42% over ten years, and it grew in seven of the ten comparable years. Earnings per share fell at compound rates of -28.92% over three years, -9.35% over five and -2.4% over ten. Free cash flow per share grew 5.78% over three years, fell 8.67% over five and grew 3.77% over ten. Analysts expect earnings per share growth of 72.04% next year, which would be a sharp recovery from the declines above, but estimates for the current year have been cut.

Valuation

Valuation is yellow. The price-to-earnings ratio is 50.0, EV/EBITDA is 5.5, price to free cash flow is 27.2, price to sales is 0.76 and price to book is 1.29. The free cash flow yield is 3.68% and the earnings yield is 2.0%. Ten-year medians and any premium or discount are not available, because there is not enough price history to compute them. The DCF gives 53.59 USD per share with a discount rate of 9.61%, using a 5% equity risk premium and capped growth; it is an order-of-magnitude estimate built on fixed assumptions, not a price target. The reverse DCF implies revenue growth of 12.74%, against a five-year revenue CAGR of 29.59%. The dividend yield is 4.01%, the forward yield is 4.17%, and the payout on free cash flow is 109.2%, so dividends currently exceed free cash flow.

Risks

The weakest numbers would hurt in specific ways. If the ROIC of 5.93% stays below the WACC of 9.55%, the company keeps investing capital at a return below its cost, which would erode the value behind the fair value band. Interest coverage of 1.88 leaves little room if operating profit falls, while an operating margin of 5.0% already sits well under its ten-year median of 10.22%. Payout on free cash flow of 109.2% means the dividend is funded beyond cash generation, and the share count growing 15.94% a year dilutes shareholders. The Beneish M-score is not available. This analysis has no debt maturity schedule and no revenue by segment, so it cannot show when debt falls due or which business lines drive the margin decline.