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Reynolds Consumer Products (REYN)
NASDAQ:REYN
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Reynolds Consumer Products
(NASDAQ:REYN)
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Rating:70Outperform
Price Target:
$26.00
â–²(11.49% Upside)
Reynolds Consumer Products demonstrates stable financial health and robust profitability, supported by strategic initiatives for growth and margin expansion. While the valuation is reasonable and the dividend yield is attractive, challenges in revenue growth and external economic pressures pose risks. The technical indicators suggest mild bullish momentum, contributing to a balanced overall outlook.
Positive Factors
Product Innovation
Reynolds' focus on product innovation, such as new scented waste bags and compostable cutlery, strengthens its market position and drives long-term growth by meeting evolving consumer preferences.
Volume Growth
Volume growth and market share gains in key product categories indicate strong demand and competitive positioning, supporting sustained revenue growth and profitability.
Strategic Investments
Increased capital spending on growth and margin expansion projects reflects a commitment to enhancing operational efficiency and long-term earnings potential.
Negative Factors
Revenue Growth Challenges
Flat revenue growth suggests potential market saturation or competitive pressures, necessitating strategic initiatives to stimulate sales and maintain market relevance.
Gross Profit Decline
Declining gross profit margins due to input cost pressures highlight challenges in maintaining profitability, impacting financial performance if not addressed.
Challenging Consumer Environment
A decline in consumer confidence and reduced SNAP benefits pose risks to consumer spending, potentially affecting sales and revenue growth in the near term.
Reynolds Consumer Products (REYN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.90B
Dividend Yield3.95%
Average Volume (3M)1.31M
Price to Earnings (P/E)15.8
Beta (1Y)0.16
Revenue Growth-0.49%
EPS Growth-13.92%
CountryUS
Employees6,400
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)0.39
Shares Outstanding210,325,070
10 Day Avg. Volume2,154,156
30 Day Avg. Volume1,310,645
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue1.69
Enterprise Value/Gross Profit6.62
Enterprise Value/Ebitda9.38
Forecast
1Y Price Target
$25.43Price Target Upside9.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Reynolds Consumer Products Business Overview & Revenue Model
Company DescriptionReynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and E-Z Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including blue and clear recycling bags, compostable bags, bags made from recycled materials, and the Hefty EnergyBag Program. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. Reynolds Consumer Products Inc. offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. operates as a subsidiary of Packaging Finance Limited.
How the Company Makes MoneyReynolds Consumer Products generates revenue primarily through the sale of its consumer goods to retail and wholesale distributors. The company benefits from a strong brand presence, which aids in driving consumer loyalty and repeat purchases. Its revenue model is largely based on product sales across various distribution channels, including supermarkets, mass merchants, and e-commerce platforms. Key revenue streams include sales of aluminum foil, food storage bags, and trash bags, which are staples in many households. Additionally, Reynolds leverages partnerships with major retailers to enhance product visibility and availability, contributing to its overall sales growth. The company also invests in marketing and promotional activities to boost brand recognition and attract new customers.
Reynolds Consumer Products Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Reynolds Consumer Products demonstrated a strong performance in a challenging environment, with notable successes in volume growth, innovation, and financial metrics. However, external economic pressures and input cost challenges remain significant concerns.Q2-2025 Updates
Positive Updates
Volume Growth and Market Share Gains
Reynolds Consumer Products reported volume growth across most categories, gaining share in areas such as Hefty Waste Bags, private label food bags, and Hefty Party Cups.
Successful Product Innovations
The company emphasized product innovation as a key driver of growth, highlighting successes like Hefty Fabuloso scented waste bags, Hefty ECOSAVE compostable cutlery, and Reynolds Kitchens air fryer cups.
Strong Financial Performance
Second-quarter net revenues increased to $938 million from $930 million in the previous year, with adjusted EBITDA reaching $163 million at the high end of expectations.
Strategic Capital Investments
Reynolds announced a $30 million to $40 million increase in capital spending for the year to support growth, margin expansion, and a robust earnings model beyond 2025.
Positive Outlook on Long-term Growth
The company remains confident in its 2025 earnings expectations and has strategic initiatives in place to drive growth and margin expansion.
Negative Updates
Challenging Consumer Environment
U.S. consumer confidence declined by 15 points in the first half of 2025, with reduced SNAP benefits affecting approximately 15% of U.S. households.
Gross Profit Decline
The company experienced a decline in gross profit due to the timing of pricing actions relative to input cost increases, particularly in commodities and tariffs.
Pressure on Retail Revenue
Retail revenue was flat year-over-year, with a more than one-point headwind from foam products affecting performance.
Company Guidance
During the second quarter of 2025 earnings call for Reynolds Consumer Products, the company provided guidance and discussed its performance metrics in a challenging consumer and operating environment. Net revenues for the quarter were reported at $938 million, an increase from $930 million in the previous year, with retail revenues remaining flat at $887 million. The company achieved an adjusted EBITDA of $163 million, which was at the high end of their projected range, compared to $172 million in the prior year. Adjusted earnings per share were reported at $0.39, slightly down from $0.41 in the previous year, excluding a discrete tax benefit. Looking ahead, Reynolds reiterated its full-year outlook, expecting net revenues to be down low single digits compared to 2024, with adjusted EBITDA between $650 million and $670 million and adjusted EPS between $1.54 and $1.61. The company has implemented pricing strategies to offset higher input costs, anticipating a 2-4 point recovery in pricing to match the same range of cost headwinds. Capital allocation plans include increased spending on high-return projects aimed at growth and margin expansion, with a focus on automation and reshoring production.Reynolds Consumer Products Financial Statement Overview
Summary
Reynolds Consumer Products demonstrates stable financial health with robust profitability and efficient equity utilization. However, challenges in revenue growth and a slight decline in free cash flow growth suggest a need for strategic initiatives to sustain and enhance its financial performance. The balanced leverage and equity structure provide a firm foundation, but managing debt levels remains crucial.Income Statement
Reynolds Consumer Products shows a stable revenue base with a slight decline in the TTM period. The gross profit margin is robust at 25.5%, and the net profit margin stands at 8.5%. Margins indicate sound profitability, although the net margin has slightly decreased compared to previous years. Revenue growth has been relatively flat, indicating a need for strategic initiatives to boost sales.75
Positive
Balance Sheet
The company maintains a strong equity position with a Debt-to-Equity ratio of 0.82, showing moderate leverage. Return on Equity (ROE) is 14.5%, indicating efficient use of equity, while the equity ratio is 44.2%, reflecting a balanced capital structure. However, the relatively high total debt may pose a risk if not managed effectively.70
Positive
Cash Flow
Operating cash flow is healthy, with an operating cash flow to net income ratio of 1.46, indicating strong cash generation. Free cash flow to net income ratio is also favorable at 1.10. However, the free cash flow growth rate has declined by 7.3% in the latest TTM period, highlighting challenges in maintaining cash flow momentum.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.67B | 3.69B | 3.76B | 3.82B | 3.56B | 3.26B |
| Gross Profit | 934.00M | 978.00M | 942.00M | 776.00M | 811.00M | 973.00M |
| EBITDA | 659.00M | 678.00M | 636.00M | 531.00M | 587.00M | 685.00M |
| Net Income | 311.00M | 352.00M | 298.00M | 258.00M | 324.00M | 363.00M |
Balance Sheet | ||||||
| Total Assets | 4.86B | 4.87B | 4.78B | 4.93B | 4.81B | 4.72B |
| Cash, Cash Equivalents and Short-Term Investments | 57.00M | 137.00M | 115.00M | 38.00M | 164.00M | 312.00M |
| Total Debt | 1.74B | 1.79B | 1.89B | 2.16B | 2.16B | 2.28B |
| Total Liabilities | 2.71B | 2.73B | 2.80B | 3.06B | 3.06B | 3.11B |
| Stockholders Equity | 2.15B | 2.14B | 1.98B | 1.87B | 1.76B | 1.61B |
Cash Flow | ||||||
| Free Cash Flow | 342.00M | 369.00M | 540.00M | 91.00M | 169.00M | 176.00M |
| Operating Cash Flow | 453.00M | 489.00M | 644.00M | 219.00M | 310.00M | 319.00M |
| Investing Cash Flow | -151.00M | -120.00M | -110.00M | -128.00M | -141.00M | -143.00M |
| Financing Cash Flow | -345.00M | -346.00M | -457.00M | -217.00M | -317.00M | 34.00M |
Reynolds Consumer Products Technical Analysis
Positive
23.32
Price Trends
22.69
Positive
22.23
Positive
23.41
Negative
Market Momentum
0.10
Positive
54.33
Neutral
34.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REYN, the sentiment is Positive. The current price of 23.32 is above the 20-day moving average (MA) of 23.15, above the 50-day MA of 22.69, and below the 200-day MA of 23.41, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 54.33 is Neutral, neither overbought nor oversold. The STOCH value of 34.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $4.90B | 15.79 | 14.85% | 3.95% | -0.49% | -13.92% | |
67 Neutral | $5.75B | 10.98 | 16.59% | 2.22% | -5.05% | -24.52% | |
66 Neutral | $4.33B | -61.77 | 17.18% | 4.78% | 0.90% | -118.86% | |
65 Neutral | $5.06B | 16.87 | 30.65% | 2.32% | -2.00% | -18.50% | |
63 Neutral | $2.87B | 21.81 | 8.66% | 3.67% | -2.55% | -40.81% | |
61 Neutral | $4.55B | 15.09 | 13.59% | 1.86% | 5.49% | -1.01% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
REYN
Reynolds Consumer Products
23.32
-6.63
-22.14%
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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.