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1. Company Snapshot

1.a. Company Description

Graphic Packaging Holding Company, together with its subsidiaries, provides fiber-based packaging solutions to food, beverage, foodservice, and other consumer products companies.It operates through three segments: Paperboard Mills, Americas Paperboard Packaging, and Europe Paperboard Packaging.The company offers coated unbleached kraft (CUK), coated recycled paperboard (CRB), and solid bleached sulfate paperboard (SBS) to various paperboard packaging converters and brokers; and paperboard packaging products, such as folding cartons, cups, lids, and food containers primarily to consumer packaged goods, quick-service restaurants, and foodservice companies; and barrier packaging products that protect against moisture, hot and cold temperature, grease, oil, oxygen, sunlight, insects, and other potential product-damaging factors.


It also offers various laminated, coated, and printed packaging structures that are produced from its CUK, CRB, and SBS, as well as other grades of paperboards that are purchased from third-party suppliers; designs and manufactures specialized packaging machines that package bottles and cans, and non-beverage consumer products; and installs its packaging machines at customer plants and provides support, service, and performance monitoring of the machines.The company markets its products primarily through sales offices and broker arrangements with third parties in the Americas, Europe, and the Asia Pacific.Graphic Packaging Holding Company was incorporated in 2007 and is headquartered in Atlanta, Georgia.

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1.b. Last Insights on GPK

Graphic Packaging Holding Company's recent performance has been negatively impacted by a series of events. The company's Q4 earnings missed estimates, with earnings of $0.29 per share, compared to $0.34 per share expected. Additionally, a law firm, Glancy Prongay & Murray LLP, is investigating potential claims against the board of directors, alleging a breach of fiduciary duties to shareholders. Brokerages have assigned an average rating of "Reduce" to the stock. Furthermore, several institutional investors, including Howard Capital Management and Deprince Race & Zollo Inc., have reduced their stakes in the company.

1.c. Company Highlights

2. Graphic Packaging's 2025 Earnings: A Review of Financial Performance and Future Outlook

Graphic Packaging reported net sales of $2.1 billion for the fourth quarter, relatively flat year-over-year, with adjusted EBITDA of $311 million. For the full year, net sales were $8.6 billion, down approximately 2%, with adjusted EBITDA of approximately $1.4 billion. The company's adjusted EPS for the full year was $1.80. The actual EPS for the quarter came out at $0.29, missing estimates of $0.34. The company's net leverage stood at 3.8x.

Publication Date: Feb -16

📋 Highlights
  • Free Cash Flow Target: Aims for adjusted free cash flow of $700–800 million in 2026, with $700 million plus incremental EBITDA growth in subsequent years.
  • Inventory Reduction: Plans to cut inventory from 20% to 15–16% of sales by 2026, targeting recycled, bleached, and finished goods inventory.
  • EBITDA Guidance: 2026 adjusted EBITDA projected at $1.05–1.25 billion (vs. normalized $1.2–1.4 billion), reflecting inflationary pressures and market volumes down ~2%.
  • Debt Paydown: Intends to reduce debt by ~$500 million in 2026, leveraging free cash flow and inventory reductions to lower leverage from 3.8x.
  • Augusta Divestiture Impact: Reduced adjusted EBITDA by $30 million in 2025, contributing to a $174 million headwind from commodity input and operating cost inflation.

Financial Performance Analysis

The company's financial performance was impacted by commodity input and operating cost inflation of approximately $150 million. A combined $174 million headwind and net performance of $59 million was not enough to offset this inflation. The Augusta divestiture reduced adjusted EBITDA by $30 million, while foreign exchange provided a $13 million tailwind.

Guidance and Outlook

For 2026, Graphic Packaging expects net sales in the range of $8.4 billion to $8.6 billion, assuming volumes in the range of down 1% to up 1%. Adjusted EBITDA is expected to be in the range of $1.050 billion to $1.250 billion, with a normalized range of $1.2 billion to $1.4 billion. Analysts estimate revenue growth of 1.0% for the next year.

Valuation Metrics

Graphic Packaging's current valuation metrics include a P/E Ratio of 8.3, P/B Ratio of 1.1, P/S Ratio of 0.43, EV/EBITDA of 6.69, Dividend Yield of 3.54%, and Free Cash Flow Yield of -2.21%. The company's Net Debt / EBITDA stands at 3.96, and ROIC is at 6.56%. ROE is reported at 13.67%. These metrics indicate that the company is trading at a reasonable valuation, with a relatively high dividend yield.

Operational Focus

Graphic Packaging is focused on enhancing profitability through cost actions and operational efficiencies, reducing inventory and capital spending to drive significant free cash flow generation, and driving disciplined organic growth with innovation and exceptional customer service. The company aims to reduce its inventory balance towards the 15% to 16% of sales goal, primarily focusing on recycled, bleached, and cup stock, as well as finished goods inventory.

Future Plans

The company plans to reduce debt given its current leverage position, expecting to pay down approximately $500 million in 2026. It will also increase share repurchase activity as leverage declines. Graphic Packaging's mid- to long-term shareholder value creation plan involves enhancing profitability through cost structure optimization and operational efficiency.

3. NewsRoom

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Graphic Packaging to Present at Raymond James Institutional Investors Conference on March 2

Feb -16

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Graphic Packaging Holding Company - GPK

Feb -12

Source: prnewswire.com

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Graphic Packaging Holding Company (GPK) Q4 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

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Graphic Packaging (GPK) Q4 Earnings Miss Estimates

Feb -03

Source: zacks.com

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Graphic Packaging Holding Company Reports Fourth Quarter and Full-Year 2025 Results

Feb -03

Source: prnewswire.com

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Graphic Packaging Holding Company (NYSE:GPK) Receives Average Recommendation of “Reduce” from Brokerages

Jan -29

Source: defenseworld.net

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Graphic Packaging Holding Company - GPK

Jan -22

Source: prnewswire.com

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Glancy Prongay & Murray LLP Announces Investigation of Graphic Packaging Holding Company (GPK) on Behalf of Investors

Jan -21

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Americas Paperboard Packaging

Expected Growth: 2.0%

The 2.0% growth of Americas Paperboard Packaging from Graphic Packaging Holding Company is driven by increasing demand for sustainable packaging, growth in e-commerce, and rising consumption of packaged food and beverages. Additionally, the company's focus on innovation, cost savings initiatives, and strategic acquisitions are expected to contribute to its growth.

Europe Paperboard Packaging

Expected Growth: 2.0%

The 2.0% growth in Europe Paperboard Packaging from Graphic Packaging Holding Company is driven by increasing demand for sustainable packaging, growth in e-commerce, and rising consumption of packaged food and beverages. Additionally, the company's focus on innovation, cost savings initiatives, and strategic acquisitions are contributing to its growth in the region.

Paperboard Manufacturing

Expected Growth: 2.0%

Graphic Packaging Holding Company's 2.0% growth in Paperboard Manufacturing is driven by increasing demand for sustainable packaging, growth in e-commerce, and rising consumption of packaged food and beverages. Additionally, the company's strategic acquisitions, cost savings initiatives, and investments in innovative products and technologies also contribute to its growth.

Corporate/Other/Eliminations

Expected Growth: 2.0%

The 2.0% growth in Corporate/Other/Eliminations at Graphic Packaging Holding Company is driven by improved operational efficiencies, reduced overhead costs, and strategic investments in digital transformation. Additionally, the company's focus on sustainability and innovation has led to increased productivity and cost savings, contributing to the segment's growth.

7. Detailed Products

Paperboard

A type of paper-based material used for packaging, made from layers of paper pulp, used for cereal boxes, file folders, and other applications

Folding Cartons

A type of packaging made from paperboard, used for packaging of food, pharmaceuticals, and other consumer goods

Converted Paper Products

A range of paper-based products, including cups, lids, and containers, used for hot and cold beverages

Specialty Packaging

Customized packaging solutions for specific industries, such as food, pharmaceuticals, and cosmetics

Sustainable Packaging

Eco-friendly packaging solutions, made from recycled materials, biodegradable, and compostable

8. Graphic Packaging Holding Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Graphic Packaging Holding Company is medium due to the availability of alternative packaging solutions. However, the company's focus on sustainable and innovative packaging solutions helps to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major consumer goods companies that Graphic Packaging Holding Company supplies to. These customers have significant negotiating power, which can impact the company's pricing and profitability.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's large scale of operations and its ability to negotiate favorable prices with suppliers. Additionally, the company's focus on sustainability and environmental responsibility helps to build strong relationships with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the packaging industry, including significant capital expenditures and regulatory requirements. Additionally, Graphic Packaging Holding Company's established relationships with customers and suppliers make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry in the packaging industry is medium due to the presence of several established players. However, Graphic Packaging Holding Company's focus on innovation and sustainability helps to differentiate it from competitors and mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.50%
Debt Cost 5.74%
Equity Weight 34.50%
Equity Cost 8.29%
WACC 6.62%
Leverage 189.90%

11. Quality Control: Graphic Packaging Holding Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sonoco

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Value: 7.3

Growth: 5.0

Quality: 5.6

Yield: 8.0

Momentum: 2.0

Volatility: 8.7

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Reynolds Consumer Products

A-Score: 6.0/10

Value: 5.6

Growth: 4.9

Quality: 5.6

Yield: 7.0

Momentum: 3.5

Volatility: 9.3

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Greif

A-Score: 6.0/10

Value: 8.2

Growth: 4.0

Quality: 5.8

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

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PCA

A-Score: 5.2/10

Value: 3.9

Growth: 4.7

Quality: 5.6

Yield: 6.0

Momentum: 3.0

Volatility: 8.3

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Graphic Packaging

A-Score: 5.0/10

Value: 7.8

Growth: 6.4

Quality: 4.3

Yield: 4.0

Momentum: 0.5

Volatility: 7.0

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WestRock

A-Score: 3.9/10

Value: 7.3

Growth: 2.7

Quality: 2.3

Yield: 2.0

Momentum: 6.0

Volatility: 3.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.42$

Current Price

12.42$

Potential

-0.00%

Expected Cash-Flows