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Graphic Packaging (GPK) Up 15.7% in 3 Months: More Room to Run?
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Shares of Graphic Packaging Holding Company (GPK - Free Report) have gained 15.7% in the past three months, faring way better than the industry's 4.6% growth. The Industrial Products sector has risen 9.2%, while the Zacks S&P 500 composite has moved up 9% in the same time frame.
GPK has a market capitalization of around $8.8 billion and currently carries a Zacks Rank #3 (Hold).
Graphic Packaging’s shares have been on an uptrend since it reported fourth-quarter 2023 results on Feb 20, 2024. GPK’s fourth-quarter adjusted earnings per share of 75 cents marked a 27% year-over-year improvement. Adjusted earnings per share for 2023 were $2.91, 25% higher than the prior year.
Image Source: Zacks Investment Research
This is commendable, considering that the company witnessed year-over-year declines of 6% and 0.1% in revenues in the fourth quarter of 2023 and 2023, respectively. Organic sales growth was negative 4% in 2023. The decline in volumes was offset by higher pricing, cost savings from continuous improvement and other programs, and new product introductions, thus resulting in the year-over-year improvement in earnings.
The company has recently witnessed an uptick in volumes, and based on this trend, it expects to return to positive organic sales growth in the current year. Graphic Packaging has set adjusted EBITDA guidance between $1.750 billion and $1.950 billion. Adjusted earnings per share are expected to be in the range of $2.50 to $3.00.
On Feb 20, Graphic Packaging also announced that it has entered into an agreement to sell its Augusta, GA bleached paperboard manufacturing facility to Clearwater Paper. The transaction value is approximately $700 million and is subject to regulatory approvals. It is expected to close in the second quarter of 2024.
GPK’s focus on innovation in fiber-based consumer packaging solutions is expected to support its revenues. Its diversified portfolio (food & beverage 61%; foodservice 22%, household products 13% and health care & beauty 4%) will also benefit results.
Consumer preference has been on the rise for more sustainable packaging and Graphic Packaging is making investments to bring innovative packaging solutions to meet the demand. The company has completed several acquisitions in the past three years and expects to pursue further opportunities as part of its overall growth strategy.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.15 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 7% in the past three months.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 12% in the past three months.
The Zacks Consensus Estimate for AptarGroup 2024 earnings is pegged at $5.19 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days and suggests year-over-year growth of 8.6%. The company has a trailing four-quarter average earnings surprise of 7.8%. ATR’s shares have gained 14% in the past year.
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Graphic Packaging (GPK) Up 15.7% in 3 Months: More Room to Run?
Shares of Graphic Packaging Holding Company (GPK - Free Report) have gained 15.7% in the past three months, faring way better than the industry's 4.6% growth. The Industrial Products sector has risen 9.2%, while the Zacks S&P 500 composite has moved up 9% in the same time frame.
GPK has a market capitalization of around $8.8 billion and currently carries a Zacks Rank #3 (Hold).
Graphic Packaging’s shares have been on an uptrend since it reported fourth-quarter 2023 results on Feb 20, 2024. GPK’s fourth-quarter adjusted earnings per share of 75 cents marked a 27% year-over-year improvement. Adjusted earnings per share for 2023 were $2.91, 25% higher than the prior year.
Image Source: Zacks Investment Research
This is commendable, considering that the company witnessed year-over-year declines of 6% and 0.1% in revenues in the fourth quarter of 2023 and 2023, respectively. Organic sales growth was negative 4% in 2023. The decline in volumes was offset by higher pricing, cost savings from continuous improvement and other programs, and new product introductions, thus resulting in the year-over-year improvement in earnings.
The company has recently witnessed an uptick in volumes, and based on this trend, it expects to return to positive organic sales growth in the current year. Graphic Packaging has set adjusted EBITDA guidance between $1.750 billion and $1.950 billion. Adjusted earnings per share are expected to be in the range of $2.50 to $3.00.
On Feb 20, Graphic Packaging also announced that it has entered into an agreement to sell its Augusta, GA bleached paperboard manufacturing facility to Clearwater Paper. The transaction value is approximately $700 million and is subject to regulatory approvals. It is expected to close in the second quarter of 2024.
GPK’s focus on innovation in fiber-based consumer packaging solutions is expected to support its revenues. Its diversified portfolio (food & beverage 61%; foodservice 22%, household products 13% and health care & beauty 4%) will also benefit results.
Consumer preference has been on the rise for more sustainable packaging and Graphic Packaging is making investments to bring innovative packaging solutions to meet the demand. The company has completed several acquisitions in the past three years and expects to pursue further opportunities as part of its overall growth strategy.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , Applied Industrial Technologies (AIT - Free Report) , and AptarGroup (ATR - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), and AIT and PRLB carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.15 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 7% in the past three months.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 12% in the past three months.
The Zacks Consensus Estimate for AptarGroup 2024 earnings is pegged at $5.19 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days and suggests year-over-year growth of 8.6%. The company has a trailing four-quarter average earnings surprise of 7.8%. ATR’s shares have gained 14% in the past year.