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Graphic Packaging Holding Gets Upgraded to a ‘Buy’

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Price movement

Graphic Packaging Holding (GPK) has a market cap of $4.2 billion. It rose 3.6% to close at $13.06 per share on December 7, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.9%, 4.3%, and 3.0%, respectively, on the same day.

GPK is trading 2.2% above its 20-day moving average, 0.14% below its 50-day moving average, and 0.83% 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 25.7% on December 7.

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

  • International Paper (IP): $21.9 billion
  • WestRock (WRK): $13.2 billion

GPK’s rating

On December 7, 2016, Bank of America Merrill Lynch upgraded Graphic Packaging Holding’s rating to “buy” from “neutral.”

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Performance of Graphic Packaging in 3Q16

Graphic Packaging Holding (GPK) reported 3Q16 net sales of $1.1 billion, a rise of 3.1% compared to $1.2 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 ~$0.08 per share on its common stock. The dividend will be paid on January 5, 2017, to shareholders of record on December 15, 2016.

Next, let’s look at Avery Dennison (AVY).

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