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CLSA Rated Graphic Packaging Holding as ‘Outperform’

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Price movement

Graphic Packaging Holding Company (GPK) has a market cap of $4.1 billion. It fell 1.2% to close at $12.81 per share on November 22, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -1.3%, -6.8%, and 0.98%, respectively, on the same day.

GPK is trading 1.2% above its 20-day moving average, 3.9% below its 50-day moving average, and 2.3% below its 200-day moving average.

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Related ETF and peers

The Vanguard Small-Cap Value ETF (VBR) invests 0.26% of its holdings in GPK. The YTD price movement of VBR was 21.3% on November 22.

The market caps of GPK’s competitors are as follows:

  • International Paper Company (IP) — $19.9 billion
  • WestRock Company (WRK) — $12.6 billion

GPK’s rating

On November 22, 2016, CLSA initiated the coverage of Graphic Packaging Holding Company with an “outperform” rating and set the stock’s price target at $15.00 per share.

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Performance of Graphic Packaging in 3Q16

Graphic Packaging (GPK) reported 3Q16 net sales of $1.10 billion, a rise of 3.1% compared to net sales of $1.07 billion in 3Q15. The company’s income from operations as a percentage of net sales narrowed 80 basis points in 3Q16 compared to 3Q15.

Its net income fell to $57.8 million in 3Q16 compared to $60.2 million in 3Q15. It reported EPS (earnings per share) of $0.18 for 3Q16 and 3Q15. It reported adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] of $200.1 million in 3Q16, a rise of 1.5% compared to 3Q15.

GPK’s cash and cash equivalents fell 16.8% and its inventories rose 6.2% between 3Q16 and 4Q15.

Quarterly dividend

GPK has declared a quarterly cash dividend of $0.075 per share on its common stock. The dividend will be paid on January 5, 2017, to shareholders of record on December 15, 2016.

Now, we’ll look at Dr Pepper Snapple Group (DPS).

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