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Reynolds Consumer Products (REYN)
NASDAQ:REYN
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Reynolds Consumer Products
(NASDAQ:REYN)63Neutral
Positive Factors
Financial Performance
Reynolds Consumer Products reported Q4 results that were above Street expectations on the top line.
Leadership and Management
The company announced the appointment of current CFO Mr. Scott Huckins as its next President and CEO and current Head of FP&A Mr. Nathan Lowe as CFO, which reflects sound succession planning.
Negative Factors
Guidance and Outlook
Q1 2025 and FY2025 guidance came in below expectations, with the foam plate category expected to decline.
Reynolds Consumer Products (REYN) vs. S&P 500 (SPY)
Market Cap
$5.01B
Dividend Yield3.73%
Average Volume (3M)693.86K
Price to Earnings (P/E)14.3
Beta (1Y)0.24
Revenue Growth-1.65%
EPS Growth18.38%
CountryUS
Employees6,400
SectorConsumer Cyclical
Sector Strength53
IndustryContainers & Packaging
Share Statistics
EPS (TTM)1.68
Shares Outstanding210,171,170
10 Day Avg. Volume783,555
30 Day Avg. Volume693,857
Financial Highlights & Ratios
PEG Ratio0.78
Price to Book (P/B)N/A
Price to Sales (P/S)1.40
Price to Cash Flow (P/CF)7.10
P/FCF Ratio7.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.00Price Target Upside21.54% Upside
Rating ConsensusHold
Number of Analyst Covering8
Reynolds Consumer Products Business Overview & Revenue Model
Company DescriptionReynolds Consumer Products (REYN) is a leading company in the consumer goods sector, specializing in the production and distribution of household essentials. The company's core products include aluminum foil, plastic wrap, waste bags, and disposable tableware, sold under well-known brand names such as Reynolds Wrap, Hefty, and Alcan. Operating primarily in North America, Reynolds Consumer Products serves both retail and commercial markets, offering a range of products designed for food storage, waste management, and cooking convenience.
How the Company Makes MoneyReynolds Consumer Products generates revenue through the sale of its consumer goods products in grocery stores, mass merchants, and online platforms. The company has a diverse portfolio of trusted brands that cater to everyday consumer needs, ensuring a steady demand for its products. Key revenue streams include the sale of aluminum foil and food storage solutions under the Reynolds Wrap brand, which are staple items in households. Additionally, the Hefty brand contributes significantly to revenue through its line of waste bags and disposable tableware. Partnerships with major retailers and distributors amplify the company's market reach, while ongoing product innovation and brand loyalty help sustain and grow earnings. The company's ability to leverage economies of scale and maintain efficient production processes also plays a crucial role in its profitability.
Reynolds Consumer Products Financial Statement Overview
Summary
Reynolds Consumer Products shows a stable revenue stream with improving margins. However, the high debt-to-equity ratio and negative equity present financial risks. Despite strong cash flow generation, the company needs to focus on debt reduction and liability management to improve financial health.Income Statement
The company shows a consistent revenue base with a slight decline from 2023 to 2024, while gross profit and net income have slightly improved. The gross profit margin for 2024 stands at 27.03%, and the net profit margin is 9.73%, indicating decent profitability in the industry. The EBIT and EBITDA margins indicate stable operational performance with EBITDA at 15.17%.75
Positive
Balance Sheet
The company has a high debt-to-equity ratio due to negative or zero equity in 2024, suggesting potential financial risk. The total debt remains significant, although reduced from prior years. With previous equity ratios showing some stability, the current situation requires attention to manage liabilities effectively.50
Neutral
Cash Flow
Operating cash flow is robust at $489 million in 2024, maintaining a positive free cash flow. However, the free cash flow growth rate has shown volatility over the years. The operating cash flow to net income ratio is positive, suggesting efficient cash conversion from earnings, though the decrease in free cash flow compared to previous years poses some concerns.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.62B | 3.76B | 3.82B | 3.56B | 3.26B | Gross Profit |
| 978.00M | 942.00M | 776.00M | 811.00M | 973.00M | EBIT |
| 549.00M | 512.00M | 414.00M | 478.00M | 586.00M | EBITDA |
| 707.00M | 636.00M | 531.00M | 587.00M | 685.00M | Net Income Common Stockholders |
| 352.00M | 298.00M | 258.00M | 324.00M | 363.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 137.00M | 115.00M | 38.00M | 164.00M | 312.00M | Total Assets |
| 4.87B | 4.78B | 4.93B | 4.81B | 4.72B | Total Debt |
| 1.69B | 1.89B | 2.16B | 2.16B | 2.28B | Net Debt |
| 1.69B | 1.77B | 2.12B | 1.99B | 1.97B | Total Liabilities |
| 2.73B | 2.80B | 3.06B | 3.06B | 3.11B | Stockholders Equity |
| 2.14B | 1.98B | 1.87B | 1.76B | 1.61B |
| Cash Flow | Free Cash Flow | |||
| 489.00M | 540.00M | 91.00M | 169.00M | 176.00M | Operating Cash Flow |
| 489.00M | 644.00M | 219.00M | 310.00M | 319.00M | Investing Cash Flow |
| -120.00M | -110.00M | -128.00M | -141.00M | -143.00M | Financing Cash Flow |
| -346.00M | -457.00M | -217.00M | -317.00M | 34.00M |
Reynolds Consumer Products Technical Analysis
Negative
23.86
Price Trends
25.97
Negative
26.99
Negative
27.80
Negative
Market Momentum
-0.53
Negative
37.03
Neutral
34.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REYN, the sentiment is Negative. The current price of 23.86 is below the 20-day moving average (MA) of 24.65, below the 50-day MA of 25.97, and below the 200-day MA of 27.80, indicating a bearish trend. The MACD of -0.53 indicates Negative momentum. The RSI at 37.03 is Neutral, neither overbought nor oversold. The STOCH value of 34.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REYN.
Reynolds Consumer Products Risk Analysis
Reynolds Consumer Products disclosed 44 risk factors in its most recent earnings report. Reynolds Consumer Products reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Reynolds Consumer Products Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $406.08B | 27.59 | 30.25% | 2.29% | 0.49% | 5.02% | |
74 Outperform | $27.23B | 46.70 | 13.42% | 1.02% | 4.08% | -22.34% | |
71 Outperform | $47.10B | 18.80 | 302.98% | 3.40% | -1.83% | 45.13% | |
65 Neutral | $18.57B | 41.21 | -1114.63% | 3.12% | -1.98% | 474.83% | |
64 Neutral | $15.87B | 20.98 | 6.59% | 3.86% | -1.84% | -5.14% | |
63 Neutral | $5.01B | 14.26 | 16.43% | 3.73% | -1.65% | 18.38% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
REYN
Reynolds Consumer Products
23.86
-4.31
-15.30%
CHD
Church & Dwight
110.71
9.38
9.26%
CLX
Clorox
150.77
5.01
3.44%
HRL
Hormel Foods
28.90
-4.08
-12.37%
KMB
Kimberly Clark
141.14
20.73
17.22%
PG
Procter & Gamble
173.18
17.45
11.21%
Reynolds Consumer Products Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -13.39% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong financial performance in 2024, with record profitability and effective debt reduction. However, challenges such as expected revenue decline in 2025, driven by foam category downturns and raw material cost pressures, pose concerns. The company is implementing strategic initiatives to drive future growth, but the immediate outlook is tempered by these challenges.Highlights
Strong Profitability and Cash Flow
2024 marked the strongest profitability in the company's history outside of 2020. The company delivered earnings ahead of expectations and drove significant cash flow, paying down more debt than targeted.
Record Innovation Launches
The Presto business unit achieved a record number of innovation launches in 2024, contributing to overall growth and new market opportunities.
Deleveraging Success
Paid down $150 million of debt throughout 2024, with an additional $50 million paid in January 2025, achieving a leverage ratio of 2.3 times trailing 12 months adjusted EBITDA.
Lowlights
Projected Revenue Decline for 2025
Net revenues are anticipated to be down in the low-single digits for 2025, driven by a double-digit decline in foam plates, which impact overall category growth.
Impact of Raw Material Costs
Increased costs of raw materials, including aluminum, are expected to be a significant headwind, impacting profitability.
Potential Tariff Risks
Tariff developments on raw materials from Mexico and Canada have not been factored into the guide, posing a potential risk to cost structures.
Company Guidance
During the fourth quarter and full year 2024 earnings call, Reynolds Consumer Products provided guidance reflecting strong performance and strategic plans for 2025. The company reported an increase in consolidated retail volume by 1% in the fourth quarter, marking progress across all business units. Reynolds achieved a net revenue of $3.695 billion for 2024, surpassing initial guidance, and delivered an adjusted EBITDA of $678 million, a 7% increase from the previous year. The company also managed to reduce leverage to 2.3 times adjusted EBITDA by year-end. Looking ahead, Reynolds expects net revenues in 2025 to decrease slightly, driven by a projected 2% decline in overall categories, primarily due to a double-digit decline in foam dishes, which constitute less than 10% of revenue. The projected adjusted EBITDA for 2025 is between $670 million and $690 million, with a focus on enhancing growth through distribution wins, innovation, and cost reductions. The company also plans to invest in productivity and sustainability initiatives, aiming for margin expansion and stable earnings growth. Reynolds has set a target of reaching a leverage range of 2 to 2.5 times adjusted EBITDA by year-end, with anticipated free cash flow conversion of approximately 50% of EBITDA.Reynolds Consumer Products Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Reynolds Consumer Products Refinances $1.645 Billion Loan
Positive
Mar 4, 2025
On March 4, 2025, Reynolds Consumer Products announced the successful refinancing of its $1.645 billion term loan facility, extending the maturity to 2032 and improving financial flexibility. The refinancing, led by JP Morgan, reflects the company’s strong credit profile and aims to support strategic priorities and long-term shareholder value.
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.