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Greif (GEF) Hikes URB, Tube, Core & Protective Packaging Prices

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Greif, Inc. (GEF - Free Report) is executing price hikes of $50 per ton for all grades of uncoated recycled paperboard (URB). It is also increasing the price by a minimum of 6% on all tube and core and protective packaging products. The URB price rise of new orders and shipments will be effective on or after Feb 14. Price increase for the tube and core and protective packaging products is effective with shipments starting from Mar 4.   

Greif is executing pricing actions in response to robust demand across the company’s paperboard and converting network as well as continuous inflationary cost pressure in energy, transportation, labor, maintenance, chemicals and other raw materials. These actions are likely to support the company’s margin.

Greif’s Global Industrial Packaging segment has been gaining from strong key end markets. Volume growth has been particularly strong in global rigid Intermediate Bulk Container (IBC) and large plastic drum in the last few quarters, owing to the strategic growth investments in the United States and EMEA, and ongoing recovery in the industrial end markets.

The Paper Packaging segment has been benefiting from strong volumes in converting operations and higher selling prices for an increase in published containerboard and boxboard prices. Improved demand for textiles and protective packaging has been driving tube and core volumes. Considering these factors, Greif anticipates adjusted earnings per share (EPS) between $5.85 and $6.45 in fiscal 2022. The mid-point of the guidance indicates a year-over-year improvement of 10%.

Greif will continue to benefit from a focus on operational execution, capital discipline and a strong and diverse product portfolio. The company continues to focus on its restructuring activities, which include optimizing and integrating operations and closing underperforming assets. In April 2020, Greif divested its consumer packaging group business, enabling it to focus on core industrial franchise and strategic growth priorities in IBC production and containerboard integration. Recently, the company signed an agreement to sell its 50% ownership in the Flexible Products & Services joint venture for cash proceeds of $123 million, which will be utilized to lower debt.

Price Performance

Greif’s shares have gained 28.3% in the past year compared with the industry’s growth of 14.4%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Greif currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Berry Global Group, Inc. (BERY - Free Report) , AGCO Corporation (AGCO - Free Report) and Sealed Air Corporation (SEE - Free Report) . While BERY flaunts a Zacks Rank #1 (Strong Buy), AGCO and SEE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Berry Global Group has an estimated earnings growth rate of around 2.8% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for fiscal 2022 earnings has been revised 18% upward.

In a year, BERY has increased 30.5%. Berry Global Group has a trailing four-quarter earnings surprise of 16.5%, on average.

AGCO Corporation has an expected earnings growth rate of 16.3% for 2022. The Zacks Consensus Estimate for current-year earnings has moved 1% north in the past 60 days.

AGCO Corporation’s shares have gained 9.8% in the past year. AGCO has a trailing four-quarter earnings surprise of 47.5%, on average.

Sealed Air has a projected earnings growth rate of 16.2% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved 0.7% north in the past 60 days.

SEE’s shares have gained 23.8% in a year. Sealed Air has a trailing four-quarter earnings surprise of 6.5%, on average.