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Graphic Packaging (GPK)
NYSE:GPK
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Graphic Packaging
(NYSE:GPK)
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Rating:67Neutral
Price Target:
$24.50
▲(26.29% Upside)
Graphic Packaging's overall stock score is driven by stable financial performance and strategic investments highlighted in the earnings call. While valuation is reasonable, technical indicators suggest a lack of strong momentum. The company's challenges in revenue growth and free cash flow, along with high leverage, are key risks to monitor.
Positive Factors
Sustainability Initiatives
The inclusion of paper cups in recycling specifications aligns with Graphic Packaging's sustainability focus, enhancing its market position as environmentally conscious packaging becomes a key industry driver.
Strategic Investments
The Waco project is a significant strategic investment that will enhance cost-efficiency and sustainability, contributing to long-term EBITDA growth and reinforcing the company's competitive advantage.
Innovation in Product Offerings
Innovation-driven sales growth indicates Graphic Packaging's strong adaptability and ability to meet evolving market needs, supporting sustained revenue growth and competitive positioning.
Negative Factors
Revenue Growth Challenges
Stagnant revenue growth poses a risk to long-term financial health, as it may limit the company's ability to invest in new opportunities and maintain competitive edge in a dynamic market.
High Leverage
High leverage can strain cash flow and limit financial flexibility, potentially impacting the company's ability to navigate economic fluctuations and invest in growth initiatives.
Free Cash Flow Challenges
Negative free cash flow indicates potential strain in cash generation, which could hinder the company's ability to fund operations and strategic investments, affecting long-term growth prospects.
Graphic Packaging (GPK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.75B
Dividend Yield2.22%
Average Volume (3M)3.75M
Price to Earnings (P/E)10.9
Beta (1Y)0.51
Revenue Growth-5.05%
EPS Growth-24.52%
CountryUS
Employees23,000
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)0.42
Shares Outstanding296,248,720
10 Day Avg. Volume4,124,749
30 Day Avg. Volume3,752,252
Financial Highlights & Ratios
PEG Ratio-1.55
Price to Book (P/B)2.74
Price to Sales (P/S)0.94
P/FCF Ratio-22.75
Enterprise Value/Market Cap2.10
Enterprise Value/Revenue1.40
Enterprise Value/Gross Profit6.63
Enterprise Value/Ebitda8.24
Forecast
1Y Price Target
$23.92Price Target Upside23.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Graphic Packaging Business Overview & Revenue Model
Company DescriptionGraphic Packaging Holding Company (GPK) is a leading provider of paper-based packaging solutions for a variety of consumer products. The company operates primarily in the packaging sector, focusing on the food, beverage, and consumer goods industries. GPK offers an extensive range of products, including folding cartons, containers, and specialty packaging, designed to enhance the presentation and protection of goods while promoting sustainability through recyclable materials.
How the Company Makes MoneyGraphic Packaging generates revenue through the sale of its diverse packaging products to a wide array of industries, particularly in food service, beverage, and consumer goods. The company's revenue model is primarily based on direct sales to large manufacturers and retailers who require custom packaging solutions. Key revenue streams include contracts for large volume orders, which provide steady cash flow, and specialized packaging services that cater to specific customer needs. Additionally, Graphic Packaging benefits from strategic partnerships with major companies in the food and beverage industry, which often involve long-term contracts that secure consistent business. The company's focus on innovation in sustainable packaging also positions it favorably in a market increasingly driven by environmental considerations, potentially enhancing its competitiveness and earnings.
Graphic Packaging Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment. While there are notable achievements in innovation and strategic investments, challenges persist with higher project costs and a fluctuating consumer market. The company's proactive measures and strategic planning offer optimism for future growth.Q2-2025 Updates
Positive Updates
Solid Second Quarter Financial Performance
Graphic Packaging reported sales of $2.2 billion, with an adjusted EBITDA of $336 million and an adjusted EBITDA margin of 15.3%. Adjusted EPS was $0.42, and volumes in the Americas were modestly better than expected, driven by increased promotion in the beverage sector.
Waco Facility Investment Nearing Completion
The Waco recycled paperboard investment is on schedule to begin production in the fourth quarter. This project is a major part of the Vision 2025 transformation program, expected to enhance cost-efficiency and sustainability.
Innovation Sales Growth
Graphic Packaging delivered innovation sales growth of $61 million in the second quarter, on track to reach the 2% of sales growth target for the full year. This growth highlights the company's strong position in innovation and adaptability to market needs.
Improved Recycling Specifications
The Recycled Materials Association's decision to include paper cups in their recycling specifications is a significant achievement, aligning with the company's focus on sustainability and recycling efforts.
Negative Updates
Higher Costs Impacting Waco Project
The Waco project is experiencing higher labor and engineering costs, leading to an increase in capital expenditures from $700 million to $850 million in 2025.
Challenging Consumer Environment
Volumes across consumer staples remain uneven, with consumers spending more on groceries but buying fewer items. This has created uncertainty in volume outlooks for Graphic Packaging's major markets.
Impact of Inventory Management on Margins
The decision to curtail production to reduce inventory levels impacted adjusted EBITDA margin, despite positioning the company for normal operations in the second half.
Company Guidance
During Graphic Packaging's second quarter 2025 earnings call, the company provided guidance for the rest of the year and beyond. Key financial metrics included sales of $2.2 billion, an adjusted EBITDA of $336 million, an adjusted EBITDA margin of 15.3%, and an adjusted EPS of $0.42. The company is expecting its 2025 capital expenditures to reach $850 million, with a decline to 5% of sales in 2026. Free cash flow for 2025 is projected to remain unchanged despite higher spending, due to lower cash taxes and reduced working capital. Looking ahead, the company anticipates free cash flow in 2026 to be between $700 million and $800 million, with expectations for 2027 and beyond to reach $900 million to $1 billion. The ongoing investment in the Waco recycled paperboard project is expected to contribute significantly to EBITDA in 2026, with an expected annual increase of $80 million in both 2026 and 2027. The company also highlighted the completion of its Vision 2025 transformation program and the strategic decision to curtail production to manage inventory levels, which impacted adjusted EBITDA margin but is expected to normalize in the second half of the year.Graphic Packaging Financial Statement Overview
Summary
Graphic Packaging shows stable profitability with consistent net profit margins and improved gross profit margins. However, stagnant revenue growth and challenges in free cash flow generation, coupled with high leverage, present risks. The company's solid equity base and operational efficiency provide some stability.Income Statement
The company's revenue has shown slight fluctuations, with a decrease from $9.44B in 2022 to $9.43B in 2023, but an increase in TTM to $8.64B. Gross profit margins have generally improved, indicating cost efficiency. Net profit margin is consistent, reflecting stable profitability. However, revenue growth is stagnant, which could be concerning long-term.72
Positive
Balance Sheet
Graphic Packaging demonstrates a solid equity base with increasing stockholders' equity, but the debt-to-equity ratio remains high due to significant total debt. The equity ratio is modest, suggesting a balanced asset funding approach. Return on equity is fairly strong, indicating effective use of equity capital.65
Positive
Cash Flow
The company faces challenges in free cash flow, with negative figures in recent periods, indicating potential strain in cash generation relative to capital expenditures. However, operating cash flow remains positive and strong, suggesting operational efficiency despite investment pressures.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.63B | 8.81B | 9.43B | 9.44B | 7.16B | 6.56B |
| Gross Profit | 1.82B | 1.96B | 2.19B | 1.83B | 1.07B | 1.10B |
| EBITDA | 1.47B | 1.67B | 1.79B | 1.60B | 1.04B | 909.90M |
| Net Income | 534.00M | 658.00M | 723.00M | 522.00M | 204.00M | 167.30M |
Balance Sheet | ||||||
| Total Assets | 11.79B | 11.14B | 11.18B | 10.33B | 10.46B | 7.80B |
| Cash, Cash Equivalents and Short-Term Investments | 120.00M | 157.00M | 162.00M | 150.00M | 172.00M | 179.00M |
| Total Debt | 5.83B | 5.46B | 5.62B | 5.25B | 5.79B | 3.64B |
| Total Liabilities | 8.58B | 8.13B | 8.39B | 8.18B | 8.56B | 5.96B |
| Stockholders Equity | 3.22B | 3.01B | 2.78B | 2.15B | 1.89B | 1.42B |
Cash Flow | ||||||
| Free Cash Flow | -167.00M | -363.00M | 340.00M | 541.00M | -193.00M | 199.30M |
| Operating Cash Flow | 769.00M | 840.00M | 1.14B | 1.09B | 609.00M | 845.60M |
| Investing Cash Flow | -1.02B | -342.00M | -1.02B | -435.00M | -2.39B | -668.70M |
| Financing Cash Flow | 241.00M | -489.00M | -106.00M | -666.00M | 1.78B | -152.00M |
Graphic Packaging Technical Analysis
Negative
19.40
Price Trends
21.64
Negative
21.81
Negative
23.97
Negative
Market Momentum
-0.72
Positive
34.06
Neutral
15.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPK, the sentiment is Negative. The current price of 19.4 is below the 20-day moving average (MA) of 20.35, below the 50-day MA of 21.64, and below the 200-day MA of 23.97, indicating a bearish trend. The MACD of -0.72 indicates Positive momentum. The RSI at 34.06 is Neutral, neither overbought nor oversold. The STOCH value of 15.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GPK.
Graphic Packaging Risk Analysis
Graphic Packaging disclosed 13 risk factors in its most recent earnings report. Graphic Packaging reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Graphic Packaging Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | 19.43B | 21.27 | 19.53% | 2.32% | 8.98% | 25.81% | |
67 Neutral | $5.75B | 10.88 | 17.71% | 2.22% | -5.05% | -24.52% | |
66 Neutral | 4.33B | -61.77 | 17.18% | 4.78% | 0.90% | -118.86% | |
65 Neutral | 5.06B | 16.33 | 30.65% | 2.32% | -2.00% | -18.50% | |
61 Neutral | 4.55B | 14.73 | 13.59% | 1.86% | 5.49% | -1.01% | |
52 Neutral | 2.03B | -7.92 | -11.70% | ― | -3.36% | 11.88% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
GPK
Graphic Packaging
19.40
-9.66
-33.24%
OI
O-I Glass
13.15
0.03
0.23%
PKG
Packaging
215.95
5.73
2.73%
SEE
Sealed Air
34.42
-1.00
-2.82%
SLGN
Silgan Holdings
42.50
-9.20
-17.79%
SON
Sonoco Products
43.91
-8.33
-15.95%
Graphic Packaging Corporate Events
Executive/Board Changes
Graphic Packaging Board Member Resigns in August 2025
Neutral
Aug 11, 2025
On August 6, 2025, Mr. Dean A. Scarborough resigned from his position as a member of the Board of Directors at Graphic Packaging Holding Company. His resignation was not due to any disagreements with the company or its management.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.