WestRock Co.

The stable outlook on WestRock reflects our expectation that the improving macroeconomic environment, combined with the company's recently announced price increases, will enable it to support debt leverage in the 2.5x-3x range over the next 12 months. We could lower our ratings on WestRock if its debt leverage rises above 4x on a sustained basis and with no clear prospects for recovery, which would likely be caused by weaker-than-expected operating performance, significant debt-financed acquisition activity, or upsized shareholder rewards. We could raise our ratings on WestRock if its leverage remains below 2.5x on a sustained basis. Although the company's debt leverage could dip below this level at times, we would require a demonstrated commitment from the company that it will

...Strong demand as economic activity emerged from the pandemic lead to volume growth and higher selling prices in 2021. Net sales for WestRock increased about 6.6% to $18.7 billion for fiscal 2021 as the company saw a rebound in demand across most of its end markets for both is corrugated packaging and consumer packaging segments. The volume demand growth and tight inventory levels for much of the last year, coupled with persistent and high inflation across essentially all operating costs, led to multiple price increases across its corrugated and paperboard grades. As we look into 2022, higher selling prices to start the year should continue to hold up EBITDA margins against continued inflation as we expect demand growth to remain steady in the mid-single-digit percentage area. We expect the company to leverage its strong network, including its distribution centers, transportation assets, and product development expertise to provide an integrated solution for its customers, while continuing...

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