KeyBanc Maintains Their Sell Rating on Greif Inc (GEF)


KeyBanc analyst Adam Josephson maintained a Sell rating on Greif Inc (GEF) today. The company’s shares opened today at $36.50, close to its 52-week low of $34.64.

Josephson commented:

“We are maintaining our estimates and will update them when the deal closes; we are reducing our price target from $40 to $31 to reflect these added risks. Our downwardly revised price target implies a ~6x EBITDA multiple on a pro forma basis, which we consider reasonable given all the risks; the implied pro forma multiple compares to the stock’s 10-yr. average of 6.8x. Compared to the last 10 years, GEF will be much more levered than normal (see chart below), and we may well be at the tail end of the economic cycle, both of which warrant a lower than average multiple in our view. We also note that not only is the acquired Caraustar business likely earning all-time high margins, but GEF’s current paper packaging business is definitely earning all-time high margins; these things tend to happen at the peak of an economic cycle.”

According to TipRanks.com, Josephson is a 4-star analyst with an average return of 9.1% and a 67.6% success rate. Josephson covers the Consumer Goods sector, focusing on stocks such as International Paper Co, Avery Dennison Corp, and Graphic Packaging.

Currently, the analyst consensus on Greif Inc is a Moderate Buy with an average price target of $53.25, a 45.9% upside from current levels. In a report released today, BMO Capital also downgraded the stock to Sell with a $35 price target.

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The company has a one-year high of $62.81 and a one-year low of $34.64. Currently, Greif Inc has an average volume of 149.2K.

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Greif, Inc. engages in the production of industrial packaging products and services. It operates through the following segments: Rigid Industrial Packaging and Services, Paper Packaging and Services, Flexible Products and Services, and Land Management.

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