Graphic Packaging Holding Firm GPK is a sustainable paper and fiber-based packaging agency that fell in need of earnings expectations in early February and offered disappointing steering.
Graphic Packaging’s latest downward earnings revisions are a part of a gentle decline during the last year-plus because the economic system cools and inflation stays.
GPK Inventory 101
Graphic Packaging’s portfolio of paper packaging merchandise are important cogs within the economic system, serving purchasers in industries starting from meals, drinks, and meals service to non-public care, family merchandise, pets, and past.
GPK’s paper-based packaging options embrace folding cartons, cooking options, meals service containers, cups, and extra.
The Atlanta, Georgia-headquartered agency works with loads of recognizable manufacturers, and it expanded its attain within the post-Covid world by means of some key acquisitions.
Graphic Packaging’s buy of AR Packaging Group in 2021 boosted its geographical attain as a result of AR was one in every of Europe’s main packaging corporations.
Picture Supply: Zacks Funding Analysis
Graphic Packaging got here up in opposition to a troublesome to compete in opposition to stretch of development. GPK’s income fell 7% in 2024 after flat 2023 gross sales. The paper packaging big’s adjusted earnings dropped from $2.91 in 2023 to $2.49 a share in FY24.
Graphic Packaging’s consensus 2025 earnings estimate fell one other 7% following its February 4 launch, with its FY26 determine 6% decrease.
The post-release downtrend lands GPK a Zacks Rank #5 (Robust Promote) and marks the extension of a adverse development that started in 2023. “The previous two years have offered uncommon quantity challenges for the business and our clients,” CEO Michael Doss mentioned in ready This fall remarks.
“Buyer destocking is basically over, however customers are stretched and trying to find worth of their on a regular basis purchases.”
Keep Away from GPK Inventory for Now?
Graphic Packaging inventory has climbed simply 14% up to now two years in comparison with the S&P 500’s 52% run. The benchmark has additionally doubled GPK inventory within the final decade, regardless of Graphic Packaging’s 100% surge within the trailing 5 years.
GPK’s long-term outlook stays intact. The corporate additionally raised its quarterly dividend by 10% efficient Q1 2025. Nonetheless, buyers would possibly wish to keep away from Graphic Packaging till it offers upbeat earnings steering.
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Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
