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Greif Class A (GEF)
NYSE:GEF
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Greif Class A
(NYSE:GEF)
60Neutral
Positive Factors
Debt Reduction
The proceeds from the planned divestiture of timberland are intended to be used for debt reduction, which can strengthen the company's financial position.
Operational Efficiency
Annual run-rate cost savings identified, with a target of achieving substantial savings by the end of the year, indicating ongoing efforts to improve efficiency.
Strategic Growth
Management anticipates the largest share of growth investments in the Polymer business, where it sees the greatest opportunity for acquisitions of companies with 18%+ EBITDA margin and >50% FCF conversion.
Negative Factors
Earnings Expectations
The growth trajectory for GEF will not be linear and may experience gaps between expectations and reality, as demonstrated in the recent quarterly results.
Financial Projections
FY25 guidance includes only 'low end' projections as management noted a demand inflection is not yet in sight, with all known headwinds and very few tailwinds accounted for.
Market Conditions
Trends have remained weaker than normal in industrial markets, particularly in Metal and in North America.
Greif Class A (GEF) vs. S&P 500 (SPY)
Market Cap
$2.56B
Dividend Yield4%
Average Volume (3M)187.07K
Price to Earnings (P/E)14.8
Beta (1Y)0.78
Revenue Growth6.88%
EPS Growth-39.67%
CountryUS
Employees14,000
SectorConsumer Cyclical
Sector Strength61
IndustryPackaging & Containers
Share Statistics
EPS (TTM)3.50
Shares Outstanding26,105,959
10 Day Avg. Volume165,323
30 Day Avg. Volume187,067
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.47
Price to Cash Flow (P/CF)-21.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$73.60Price Target Upside41.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Greif Class A Business Overview & Revenue Model
Company DescriptionGreif, Inc. (NYSE: GEF) is a global leader in industrial packaging products and services. The company operates in multiple sectors, primarily focusing on the production and supply of containerboard, industrial and consumer packaging, and related services. Greif's product portfolio includes steel, fiber, and plastic drums, intermediate bulk containers (IBCs), reconditioned containers, containerboard, tubes and cores, and a variety of specialty products. With a presence in over 40 countries and a commitment to sustainability, Greif serves a diverse range of industries including chemicals, food, agriculture, and pharmaceuticals.
How the Company Makes MoneyGreif makes money primarily through the manufacturing and sale of its diverse range of industrial packaging products. The company's key revenue streams include the sale of steel, fiber, and plastic drums, as well as intermediate bulk containers (IBCs), which are essential for transporting and storing bulk goods in various industries. Additionally, Greif generates income from its paper products segment, which includes containerboard and corrugated products, as well as tubes and cores used in industrial applications. The company also benefits from its reconditioning services, which extend the lifecycle of its packaging products and align with its sustainability initiatives. Strategic partnerships and long-term contracts with companies in critical industries like chemicals, agriculture, and food further bolster its revenue, ensuring a steady demand for its products and services.
Greif Class A Financial Statement Overview
Summary
Greif Class A presents a mixed financial picture. While revenue growth and stable margins are positive indicators, declining profitability and high leverage raise concerns. The company needs to manage its debt levels carefully and focus on improving cash flows to ensure financial stability in the long term.Income Statement
Greif Class A demonstrated steady revenue growth over the years, with a slight decline in the latest TTM period. The Gross Profit Margin remained stable, suggesting efficient cost management. However, the Net Profit Margin decreased due to reduced net income, indicating potential challenges in maintaining profitability. The EBIT and EBITDA margins show resilience, but the decline in EBITDA in the latest TTM period is concerning.75
Positive
Balance Sheet
The company's Debt-to-Equity Ratio increased over time, reflecting higher leverage, which could pose financial risks. The Return on Equity shows a downward trend, indicating less efficient use of equity. The Equity Ratio is stable but indicates moderate dependency on debt. Overall, the balance sheet suggests a need for caution regarding debt levels.70
Positive
Cash Flow
Operating and Free Cash Flows showed fluctuations, with a notable decline in Free Cash Flow in the latest TTM period. The Operating Cash Flow to Net Income ratio suggests adequate cash generation relative to profits. However, the Free Cash Flow to Net Income ratio is declining, pointing to potential cash flow pressure.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.51B | 5.45B | 5.22B | 6.35B | 5.56B | 4.51B | Gross Profit |
| 1.09B | 1.07B | 1.15B | 1.29B | 1.09B | 914.70M | EBIT |
| 460.40M | 464.60M | 605.50M | 621.20M | 585.20M | 304.90M | EBITDA |
| 657.10M | 464.60M | 824.50M | 839.20M | 845.70M | 601.70M | Net Income Common Stockholders |
| 203.50M | 262.10M | 359.20M | 376.70M | 390.70M | 108.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 106.96M | 197.70M | 180.90M | 147.10M | 124.60M | 105.90M | Total Assets |
| 3.50B | 6.65B | 5.96B | 5.46B | 5.82B | 5.51B | Total Debt |
| 1.03B | 3.03B | 2.54B | 2.17B | 2.52B | 2.80B | Net Debt |
| 919.54M | 2.83B | 2.36B | 2.03B | 2.39B | 2.69B | Total Liabilities |
| 2.14B | 4.40B | 3.85B | 3.65B | 4.22B | 4.29B | Stockholders Equity |
| 1.28B | 2.08B | 1.95B | 1.76B | 1.51B | 1.15B |
| Cash Flow | Free Cash Flow | ||||
| 153.60M | 169.50M | 435.90M | 474.50M | 248.70M | 317.90M | Operating Cash Flow |
| 320.70M | 356.00M | 649.50M | 657.50M | 396.00M | 454.70M | Investing Cash Flow |
| -623.70M | -658.30M | -670.20M | -28.20M | 46.80M | -25.20M | Financing Cash Flow |
| 350.70M | 324.30M | 69.70M | -531.00M | -422.90M | -405.30M |
Greif Class A Technical Analysis
Negative
51.86
Price Trends
57.70
Negative
60.97
Negative
60.67
Negative
Market Momentum
-0.75
Negative
44.56
Neutral
36.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEF, the sentiment is Negative. The current price of 51.86 is below the 20-day moving average (MA) of 55.10, below the 50-day MA of 57.70, and below the 200-day MA of 60.67, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 44.56 is Neutral, neither overbought nor oversold. The STOCH value of 36.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GEF.
Greif Class A Risk Analysis
Greif Class A disclosed 24 risk factors in its most recent earnings report. Greif Class A reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Greif Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $17.01B | 21.18 | 19.03% | 2.73% | 7.45% | 5.26% | |
68 Neutral | $4.32B | 26.51 | 6.42% | 4.75% | -6.93% | -65.66% | |
67 Neutral | $3.95B | 14.67 | 45.91% | 2.95% | -1.75% | -21.15% | |
66 Neutral | $25.96B | 31.27 | 6.74% | 3.85% | -1.57% | 84.85% | |
60 Neutral | $2.56B | 14.81 | 10.09% | 4.00% | 6.88% | -39.67% | |
59 Neutral | $11.22B | 10.13 | -1.22% | 3.96% | 1.32% | -18.57% | |
58 Neutral | $1.73B | ― | -7.89% | ― | -8.09% | -1.97% |
* Consumer Cyclical Sector Average
Performance Comparison
GEF
Greif Class A
51.86
-11.35
-17.96%
IP
International Paper Co
47.98
11.18
30.38%
OI
O-I Glass
10.53
-4.98
-32.11%
PKG
Packaging
183.42
-2.62
-1.41%
SEE
Sealed Air
24.41
-8.18
-25.10%
SON
Sonoco Products
43.78
-11.53
-20.85%
Greif Class A Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -13.23% | Next Earnings Date: Jun 4, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. Despite strong EBITDA performance and growth in certain segments like polymers and integrated solutions, challenges persist, including mill closures, increased interest expenses, and demand softness in metals and fiber segments. The cost optimization efforts and strategic focus on high-growth markets are positive, but short-term financial pressures and market uncertainties remain significant.Highlights
Strong EBITDA and Cost Optimization
Greif achieved an adjusted EBITDA of $145 million, an improvement of $7 million over the prior year. The company has identified $5 million of savings on a run rate basis and reaffirms its expectation to achieve at least $15 million to $25 million in run rate savings by the end of 2025.
Positive Price Cost Spread
The company reported a $27 million positive price cost spread, driven by a $40 per ton increase in containerboard prices and lower OCC costs assumptions, contributing $19 million to the spread.
Growth in Polymers and Integrated Solutions
Polymers saw a 2.7% increase driven by small containers and IBC demand in ag and food sectors in EMEA. Integrated solutions experienced low double-digit growth in caps, closures, paints, linings, and adhesives.
Expansion in Agrochemical and Food Markets
The company reported strong growth in the agrochemical sector following acquisitions. The food and beverage sector also saw growth, supported by solutions provided to large global customers.
Lowlights
Mill Closures and Capacity Reduction
Greif announced the closure of its A1 paperboard machine in Austell, Georgia, and its containerboard and URB Flex machine in Pittsburgh, Massachusetts, reducing containerboard mill capacity by 100,000 tons and URB capacity by 90,000 tons.
Higher Interest Expenses
Interest expenses increased by $14 million due to higher debt from recent acquisitions, impacting adjusted free cash flow, which was a net use of $62 million.
Soft Demand in Metals and Fiber Segments
Metals continue to be impacted by the soft industrial economy, with demand sentiment in North America being bearish. Fiber demand remains flat, with no significant drivers for demand increase.
SG&A Cost Inflation
Higher year-over-year SG&A costs affected EBITDA margins, attributed to short-term SG&A cost inflation as resources were reallocated to areas of long-term value creation.
Company Guidance
During the Greif First Quarter 2025 Earnings Call, the company provided guidance metrics for the fiscal year, highlighting a new low-end EBITDA guidance of $710 million and a revised low-end free cash flow guidance of $245 million. The guidance considers $27 million of positive price-cost effects, largely due to a $40 per ton containerboard price increase and a reduction in OCC cost assumptions. Additionally, a $100 million cost optimization effort is underway, with $5 million in run-rate savings already identified, and a total expectation of $15 million to $25 million by the end of fiscal 2025. The strategic sale of approximately 176 acres of timberland is intended to reduce debt, and the company's focus on end markets such as agrochemicals, food and beverage, and pharma is expected to drive growth. The guidance emphasizes operational improvements, and despite challenging industrial economics, Greif remains confident in achieving its 2027 commitments of $1 billion EBITDA and $500 million free cash flow.Greif Class A Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Greif Class A Reports Q1 2025 Income Decline
Negative
Mar 3, 2025
Greif, Inc. reported a significant decrease in net income for the fiscal first quarter of 2025, primarily due to a non-recurring income tax benefit in the previous year. Despite this, the company saw an increase in adjusted EBITDA and announced strategic actions including the divestment of timberland and closure of certain facilities to optimize costs. These actions are part of Greif’s efforts to manage current industrial challenges while aligning its portfolio for long-term growth, as highlighted by CEO Ole Rosgaard.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.