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Here's Why You Should Add Greif (GEF) Stock to Your Portfolio
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Greif, Inc. (GEF - Free Report) is poised well to gain on solid demand witnessed in its key end markets. Its ongoing focus on operational execution and pricing actions will also aid results. GEF continues to invest in its business, return excess cash to its shareholders and lower its debt levels. These factors make it a compelling investment option.
Greif currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 17% so far this year against the industry’s decline of 0.8%.
Image Source: Zacks Investment Research
Solid Q2 Results: Greif reported second-quarter fiscal 2022 adjusted earnings per share of $2.41, marking a 113% improvement year over year. Revenues increased 24% to $1,667 million in the quarter.
Bullish Outlook: Greif expects adjusted earnings per share for fiscal 2022 between $7.45 and $7.75. The midpoint of the guidance indicates an improvement of 36% from the adjusted earnings per share of $5.60 in fiscal 2021.
Positive Earnings Surprise History: GEF has a trailing four-quarter earnings surprise of 22.9%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for Greif’s fiscal 2022 earnings has moved 18% north over the past 90 days. The same for fiscal 2023 has moved up 9% in the same time frame.
Positive Growth Projections: The Zacks Consensus Estimate for GEF’s fiscal 2022 earnings per share is currently pegged at $7.66, indicating growth of 36.8% from the previous fiscal year’s reading. The stock has an estimated long-term earnings growth rate of 10%.
Inexpensive Valuation: The trailing 12-month EV/EBITDA ratio is 6.09 GEF, while the industry's average is 18.41.
Key Drivers
Greif is witnessing a broad-based improvement in several key end markets. The Global Industrial Packaging segment is constantly seeing solid demand in its global resin-based portfolio with higher volumes witnessed in plastic drums and Intermediate Bulk Container (IBC). The segment is riding on the strategic growth investments in the United States and EMEA, and an ongoing recovery in the industrial end markets. The Paper Packaging segment continues gaining from strong volumes and higher selling prices on increases in published containerboard and boxboard prices. Robust demand and higher pricing are likely to negate the adverse impact of cost inflation and contribute to earnings.
In February 2019, Greif had acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout strengthened Greif’s leadership in industrial packaging and significantly bolstered its margins, free cash flow and profitability. It continues anticipating run-rate synergies of at least $70 million by 2022.
Greif will also benefit from its focus on operational execution, capital discipline, and its solid and diverse product portfolio. GEF will continue to concentrate on its restructuring activities and invest in its business while lowering its debt levels. Given its improving leverage profile and sturdy prospects for cash generation, the board of directors hiked the quarterly dividend by 4.5%. GEF boasts a stronger dividend yield than its peers.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Applied Industrial Technologies, Inc. (AIT - Free Report) , Sonoco Products (SON - Free Report) and Valmont Industries, Inc. (VMI - Free Report) .
Applied Industrial presently sports a Zacks Rank #1 . AIT delivered a trailing four-quarter earnings surprise of 22.8%, on average.
AIT’s earnings estimates have increased 5.8% for fiscal 2023 (ending June 2023) in the past 60 days. The estimate indicates growth of 10.9% from the last fiscal year’s reading. Its shares have gained 8.5% so far this year.
Sonoco presently has a Zacks Rank of 1. SON delivered a trailing four-quarter earnings surprise of 4.06%, on average.
The earnings estimate for SON for fiscal 2022 has increased 15% in the past 60 days. The estimate projects growth of 78.3% from the last fiscal year’s reported number. Its shares have risen 12% year to date.
Valmont Industries presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates for 2022 have increased 3.8%. The estimate projects growth of 27% from the prior-year actuals. VMI has appreciated 14% so far this year.
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Here's Why You Should Add Greif (GEF) Stock to Your Portfolio
Greif, Inc. (GEF - Free Report) is poised well to gain on solid demand witnessed in its key end markets. Its ongoing focus on operational execution and pricing actions will also aid results. GEF continues to invest in its business, return excess cash to its shareholders and lower its debt levels. These factors make it a compelling investment option.
Greif currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 17% so far this year against the industry’s decline of 0.8%.
Image Source: Zacks Investment Research
Solid Q2 Results: Greif reported second-quarter fiscal 2022 adjusted earnings per share of $2.41, marking a 113% improvement year over year. Revenues increased 24% to $1,667 million in the quarter.
Bullish Outlook: Greif expects adjusted earnings per share for fiscal 2022 between $7.45 and $7.75. The midpoint of the guidance indicates an improvement of 36% from the adjusted earnings per share of $5.60 in fiscal 2021.
Positive Earnings Surprise History: GEF has a trailing four-quarter earnings surprise of 22.9%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for Greif’s fiscal 2022 earnings has moved 18% north over the past 90 days. The same for fiscal 2023 has moved up 9% in the same time frame.
Positive Growth Projections: The Zacks Consensus Estimate for GEF’s fiscal 2022 earnings per share is currently pegged at $7.66, indicating growth of 36.8% from the previous fiscal year’s reading. The stock has an estimated long-term earnings growth rate of 10%.
Inexpensive Valuation: The trailing 12-month EV/EBITDA ratio is 6.09 GEF, while the industry's average is 18.41.
Key Drivers
Greif is witnessing a broad-based improvement in several key end markets. The Global Industrial Packaging segment is constantly seeing solid demand in its global resin-based portfolio with higher volumes witnessed in plastic drums and Intermediate Bulk Container (IBC). The segment is riding on the strategic growth investments in the United States and EMEA, and an ongoing recovery in the industrial end markets. The Paper Packaging segment continues gaining from strong volumes and higher selling prices on increases in published containerboard and boxboard prices. Robust demand and higher pricing are likely to negate the adverse impact of cost inflation and contribute to earnings.
In February 2019, Greif had acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout strengthened Greif’s leadership in industrial packaging and significantly bolstered its margins, free cash flow and profitability. It continues anticipating run-rate synergies of at least $70 million by 2022.
Greif will also benefit from its focus on operational execution, capital discipline, and its solid and diverse product portfolio. GEF will continue to concentrate on its restructuring activities and invest in its business while lowering its debt levels. Given its improving leverage profile and sturdy prospects for cash generation, the board of directors hiked the quarterly dividend by 4.5%. GEF boasts a stronger dividend yield than its peers.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Applied Industrial Technologies, Inc. (AIT - Free Report) , Sonoco Products (SON - Free Report) and Valmont Industries, Inc. (VMI - Free Report) .
Applied Industrial presently sports a Zacks Rank #1 . AIT delivered a trailing four-quarter earnings surprise of 22.8%, on average.
AIT’s earnings estimates have increased 5.8% for fiscal 2023 (ending June 2023) in the past 60 days. The estimate indicates growth of 10.9% from the last fiscal year’s reading. Its shares have gained 8.5% so far this year.
Sonoco presently has a Zacks Rank of 1. SON delivered a trailing four-quarter earnings surprise of 4.06%, on average.
The earnings estimate for SON for fiscal 2022 has increased 15% in the past 60 days. The estimate projects growth of 78.3% from the last fiscal year’s reported number. Its shares have risen 12% year to date.
Valmont Industries presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates for 2022 have increased 3.8%. The estimate projects growth of 27% from the prior-year actuals. VMI has appreciated 14% so far this year.