Truist analyst Michael Roxland recently adjusted the price target for Graphic Packaging (GPK, Financial), lowering it to $28 from a previous $30. The adjustment reflects the broader contraction in valuation multiples across the firm's coverage, driven by ongoing concerns about tariffs and the possibility of a recession due to sluggish consumer demand. Despite the lowered price target, the firm has maintained its Hold rating on GPK shares.
The revision underscores the challenges that companies like Graphic Packaging face in the current economic climate, where market uncertainties and fluctuating consumer spending patterns create a complex operating environment. Investors are advised to consider these factors when assessing the stock's potential performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Graphic Packaging Holding Co (GPK, Financial) is $30.43 with a high estimate of $34.00 and a low estimate of $27.00. The average target implies an upside of 20.91% from the current price of $25.17. More detailed estimate data can be found on the Graphic Packaging Holding Co (GPK) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Graphic Packaging Holding Co's (GPK, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Graphic Packaging Holding Co (GPK, Financial) in one year is $24.30, suggesting a downside of 3.46% from the current price of $25.17. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Graphic Packaging Holding Co (GPK) Summary page.
GPK Key Business Developments
Release Date: February 04, 2025
- Full Year 2024 Revenue: $8.8 billion
- Fourth Quarter 2024 Revenue: $2.1 billion
- Full Year 2024 Adjusted EBITDA: $1.7 billion
- Fourth Quarter 2024 Adjusted EBITDA: $404 million
- Full Year 2024 Margins: 19.1%
- Fourth Quarter 2024 Margins: 19.3%
- Full Year 2024 Adjusted EPS: $2.49
- Fourth Quarter 2024 Adjusted EPS: $0.59
- Full Year 2024 Volume Change: Down 1%
- Fourth Quarter 2024 Volume Change: Up 1%
- Full Year 2024 Dividends Paid: $122 million
- Quarterly Dividend Increase: 10% to $0.11 per share
- Net Debt at Year-End 2024: $5 million
- Net Leverage: 3 times
- 2024 Capital Expenditures: Approximately $1.2 billion
- 2025 Expected Capital Expenditures: $700 million
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Graphic Packaging Holding Co (GPK, Financial) reported strong financial performance with full-year 2024 sales of $8.8 billion and adjusted EBITDA of $1.7 billion, maintaining a robust margin of 19.1%.
- The company successfully divested its Augusta, Georgia facility, focusing 95% of its sales on high-value consumer packaging, which aligns with its strategic goals.
- GPK made significant strides in sustainability by increasing renewable energy use in its European operations and reducing its environmental footprint.
- The company demonstrated strong innovation capabilities, achieving $205 million in innovation sales growth in 2024, with plans to continue this trend in 2025.
- GPK's Vision 2030 plan is on track, transitioning from major investments to focusing on innovation and execution, which is expected to drive future growth and profitability.
Negative Points
- Full-year volumes were down approximately 1%, indicating challenges in market demand despite a positive turn in the second half of the year.
- Price declines of about 2% were consistent throughout the year, impacting revenue growth.
- The divestiture of the Augusta facility and lower open market bleached paperboard sales reduced reported sales by $389 million for the year.
- Foreign exchange movements posed a $24 million sales headwind for the full year, with potential continued impact in 2025.
- The company faces ongoing challenges in certain market segments, such as frozen and refrigerated prepared foods, and health and beauty, which remain mixed.
