Graphic Packaging Q2 adjusted EPS beats estimates, lowers outlook
GPK•Drivers of the quarter
- INFLATION PRESSURE - Co said higher commodity input and operating cost inflation reduced profitability in Q2
- COST ACTIONS - Productivity initiatives and cost reductions partially offset inflation, per CEO Robbert Rietbroek
- LOWER PRICES - Decrease in pricing contributed to lower sales and earnings in Q2
Analyst coverage and valuation
- The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 10 "hold" and 2 "sell" or "strong sell"
- The average consensus recommendation for the paper packaging peer group is "buy"
- Wall Street's median 12-month price target for Graphic Packaging Holding Co is $11.00, about 3.1% above its August 3 closing price of $11.35
- The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago
Outlook cut on higher interest expense and inflation
- Company expects 2026 net sales at high end of $8.4 bln to $8.6 bln range
- Company sees 2026 adjusted EBITDA at low end of $1.05 bln to $1.25 bln range
- Company lowers 2026 adjusted EPS guidance to $0.65-$0.90 and sees adjusted cash flow at $600 mln-$700 mln
