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Are Investors Undervaluing Graphic Packaging Holding Company (GPK) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Graphic Packaging Holding Company (GPK - Free Report) . GPK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.39 right now. For comparison, its industry sports an average P/E of 14.92. Over the past year, GPK's Forward P/E has been as high as 11.44 and as low as 8.60, with a median of 10.13.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPK has a P/S ratio of 0.93. This compares to its industry's average P/S of 0.96.

Finally, our model also underscores that GPK has a P/CF ratio of 6.49. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.16. GPK's P/CF has been as high as 7.09 and as low as 5.57, with a median of 6.51, all within the past year.

These are only a few of the key metrics included in Graphic Packaging Holding Company's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GPK looks like an impressive value stock at the moment.


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