Robert W. Baird analyst Ghansham Panjabi has maintained their neutral stance on GEF stock, giving a Hold rating on December 8.
Geoff Meacham has given his Hold rating due to a combination of factors affecting Greif Class A’s financial outlook. Despite the company’s effective operational strategies and recent acquisitions aimed at long-term growth, there are significant concerns related to the broader economic environment and its impact on the industrial packaging sector, particularly in containerboard and paperboard pricing. The analyst acknowledges that while the company is not facing further declines in consolidated volumes, the sustained low-demand environment could lead to further price erosion in the industry, which has already been observed throughout 2023.
The operations of Greif are in a solid state, with recent strategic moves positioning the company to potentially reduce its exposure to market cyclicality. However, the current volume and pricing dynamics are imposing a considerable drag on earnings. The analyst’s earnings estimate of $4.00 for FY24 reflects a cautious stance, assuming a successful pricing strategy in containerboard but minimal volume improvement. Looking ahead to FY25, the estimate increases slightly to $4.65, contextualized against the earnings fluctuations seen in previous fiscal years. The maintenance of a Neutral rating and a $70 price target based on approximately 15 times FY25 earnings per share underscores the cautious optimism balanced by awareness of Greif’s cyclical nature within the packaging industry.
In another report released on December 8, Wells Fargo also assigned a Hold rating to the stock with a $64.00 price target.
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Greif Class A (GEF) Company Description:
Greif, Inc. engages in the production of industrial packaging products and services. It operates through the following segments: Rigid Industrial Packaging and Services, Paper Packaging and Services, Flexible Products and Services, and Land Management. The Rigid Industrial Packaging and Services segment involves the production and sale of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services, such as container life cycle services, blending, filling and other packaging services, logistics and warehousing. The Paper Packaging and Services segment involves the production and sale of containerboard, corrugated sheets, corrugated containers and other corrugated products to customers in North America. The Flexible Products and Services segment involves the production and sale of flexible intermediate bulk containers and related services on a global basis and the sale of industrial and consumer shipping sacks and multiwall bag products in North America. The Land Management segment involves the management and sale of timber. This segment focuses on the active harvesting and regeneration of the company’s U.S. timber properties. The company was founded by William Greif and Albert Vanderwyst in 1877 and is headquartered in Delaware, OH.
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