Paper stocks appear to be waking up to the bull market, finally. Even laggard Gaylord Container (GCR), a producer of containerboard and unbleached kraft paper, has perked up, surging from 5 1/2 in mid-January to 8. Analysts expect Gaylord, which posted a loss last year, to be in the red again this year and turn in a profit only in 1999. One thing buoying the stock is talk of consolidation.

At Gaylord, a ''strong and well-focused asset base makes it an attractive takeover candidate,'' says BT Alex. Brown analyst Mark Wilde.

Containerboard is a highly fragmented part of the industry, so consolidation may be the quick way of enhancing shareholder returns, says Wilde. Gaylord insiders, he notes, own a fat slice of the stock. (Chairman Marvin Pomerantz has 10%). And management ''appears more open now to the idea of selling the company than in the past,'' either a cash or stock deal. ''A strategic industry player could pay 16 to 17 a share for the stock,'' he adds.