GPK
Graphic Packaging Holding Co
Industrial/Transportation
01/24/2020
Presented
| Date | 01/16/2020 |
| Price | $16.78 |
| Market Cap | $4.87B |
| Ent Value | $8.22B |
| P/E Ratio | 22.61x |
| Book Value | $5.36 |
| Div Yield | 1.79% |
| Shares O/S | 290.25M |
| Ave Daily Vol | 3,108,150 |
| Short Int | 1.58% |
Current
| Price | $29.36 |
| Market Cap | $8.81B |
| Graphic Packaging Holding Company, together with its subsidiaries, provides paper-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 folding cartons and cups, lids, and food containers primarily to consumer packaged goods, quick-service restaurants, and foodservice companies. It also manufactures corrugated medium products; 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 founded in 1992 and is headquartered in Atlanta, Georgia. |
Publicly traded companies mentioned herein: Amcor PLC (AMCR), Anheuser-Busch InBev SA/NV (ABI BB, BUD), Ball Corp (BLL), Crown Holdings Inc (CCK), Dunkin’ Brands Group Inc (DNKN), Graphic Packaging Holding Co (GPK), International Paper Co (IP), Molson Coors Beverage Co (TAP), Silgan Holdings Inc (SLGN), Sonoco Products Co (SON)
Highlights
The presenter is long shares of Graphic Packaging Holding Co (GPK), as he believes the market is underappreciating the company’s pivot in line with secular trends. Shares are trading at ~$16, or 8.4x 2020 consensus EBITDA, a discount to other companies across the packaging space that he believes have greater structural challenges. As this dynamic continues to play out, he sees GPK outperforming current expectations and its EV/EBITDA multiple expanding to ~10x. In this scenario, he has a price target of $23 – $24, representing ~50% upside from current prices, potentially in a fairly compressed timeframe.
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