GPK
Graphic Packaging Holding Co
Industrial/Transportation, Consumer
01/20/2022
Presented
| Date | 01/13/2022 |
| Price | $19.75 |
| Market Cap | $6.06B |
| Ent Value | $9.97B |
| P/E Ratio | 24.78x |
| Book Value | $6.04 |
| Div Yield | 1.52% |
| Shares O/S | 307.05M |
| Ave Daily Vol | 2,146,481 |
| Short Int | 1.63% |
Current
| Price | $29.36 |
| Market Cap | $8.81B |
| Graphic Packaging Holding Co. provides paper-based packaging solutions for a variety of products to food, beverage and other consumer products companies. The firm produces folding cartons, kraft paperboard, coated-recycled boxboard and multi-wall bags. It operates through the following business segments: Paperboard Mills, Americas Paperboard Packaging and Europe Paperboard Packaging. The Paperboard Mills segment includes the eight North American paperboard mills which produce coated unbleached kraft paperboard and coated-recycled paperboard. The Americas Paperboard Packaging segment includes paperboard folding cartons sold to consumer packaged goods companies serving the food, beverage and consumer product markets in the Americas. The Europe Paperboard Packaging segment includes paperboard folding cartons sold to consumer packaged goods companies serving the food, beverage and consumer product markets in Europe. The company was founded on December 28, 1992 and is headquartered in Atlanta, GA. |
Publicly traded companies mentioned herein: Anheuser-Busch InBev SA/NV (BUD), Ball Corp (BLL), Chipotle Mexican Grill Inc (CMG), Graphic Packaging Holding Co (GPK), Home Depot Inc/The (HD), Hormel Foods Corp (HRL), Kellogg Co (K), McDonald’s Corp (MCD), Molson Coors Beverage Co (TAP), Pfizer Inc (PFE), Westrock Co (WRK)
Highlights
The presenter is long shares of Graphic Packaging Holding Co (GPK), a leading provider of paper-based package solutions that he feels has a credible case to rerate thanks to strong organic sales growth, meaningful acquisitions, and industry leading ESG compliance. The company has a $6B market cap and $10B enterprise value, and trades at 6.9x 2022 EBITDA with 80% of its business coming from North America and the remainder from Europe. It is currently operating with 3.65x of net leverage following the completion of 2 major acquisitions in 2021, and should benefit from a pricing tailwind over the next 12 months. For these reasons, he believes the company can beat the Street’s 2022 EBITDA estimate of $1.45B by ~10%, which should lead to the multiple expanding from the current 7x to 9x - 10x. Putting this together, he gets to a price target between $33.75 - $39, or a low end target of around $23 with no multiple expansion.
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