Greif Stock Rallies After Crushing Estimates, Analyst Cautious
2022.06.09 13:31
Greif (GEF) Stock Rallies After Crushing Estimates, Analyst Cautious
By Senad Karaahmetovic
Shares of Greif (NYSE:GEF) are up more than 4% in premarket trading Thursday after the company reported second-quarter earnings and net sales that beat consensus estimates.
Greif reported Q2 adjusted EPS of $2.41, up from $1.13 in the year-ago period and above the analyst consensus of $1.71 per share. Net sales came in at $1.67 billion, up 24% YoY and above the consensus projection of $1.51 billion.
Greif reported an adjusted EBITDA of $251 million in the period, up 42% YoY and topping the consensus estimates of $209.4 million.
For the full fiscal year, Greif expects adjusted EPS in the range of $7.45 to $7.75, while analysts were looking for $6.61 per share. FY adjusted free cash flow is expected to range from $380 million to $440 million.
KeyBanc analyst Adam Josephson remains cautious on GEF stock despite the “big beat.”
“We expect GEF’s volume trends to continue to deteriorate in the quarters ahead as the global economy does the same, which begs the question of how much longer the Company’s substantial price/cost benefits will last. We nonetheless expect a favorable reaction in the stock tomorrow because of the big adj. EBITDA/EPS beat and raise,” Josephson told clients in a note.
BofA analyst George Staphos is much more positive on GEF stock as he maintained a Buy rating and a $77.00 per share price target.
“Performance in both Global Industrial Packaging (GIP) and Paper Packaging & Services (PPS) was strong and driven particularly by price/mix which contributed 35.5% and 25% to segment revenues, respectively… We remain encouraged by GEF’s progress on debt reduction ($213.5mn in F2Q) and the company’s leverage is now at 2.12x, the low end of its target range of 2-2.5x,” Staphos said in a note.
