uploads///gef pm

Bank of America/Merrill Lynch Upgrades Greif to a ‘Buy’

By

Jan. 31 2017, Updated 9:08 a.m. ET

Price movement

Greif (GEF) has a market cap of $3.1 billion. It rose 4.5% to close at $59.05 per share on January 27, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 11.5%, 11.5%, and 15.1%, respectively, on the same day.

GEF is trading 10.7% above its 20-day moving average, 10.4% above its 50-day moving average, and 34.6% above its 200-day moving average.

Article continues below advertisement

Related ETF and peers

The Vanguard Small-Cap ETF (VB) invests 0.03% of its holdings in Greif. The YTD price movement of VB was 2.1% on January 27, 2017.

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

  • International Paper (IP) — $23.6 billion
  • Sonoco Products (SON) — $5.5 billion
  • Silgan Holdings (SLGN) — $3.3 billion

GEF’s rating

On January 27, 2017, Bank of America/Merrill Lynch upgraded Greif’s rating to a “buy” from “neutral.”

Article continues below advertisement

Performance of Greif in fiscal 4Q16

Greif reported fiscal 4Q16 net sales of $867.6 million, a fall of 0.10% compared to $868.5 million in fiscal 4Q15. The company’s gross profit margin and operating margin expanded 180 basis points and 250 basis points, respectively, in fiscal 4Q16 compared to fiscal 4Q15.

Its net income, EPS (earnings per share) of its Class A shares, and EPS of its Class B shares fell to $8.5 million, $0.14, and $0.22, respectively, in fiscal 4Q16. That compares to $12.4 million, $0.21, and $0.32, respectively, in fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, Greif (GEF) reported net sales of $3.3 billion, a fall of 8.1% YoY (year-over-year). The company’s gross profit margin and operating margin expanded 210 basis points and 150 basis points, respectively, in fiscal 2016.

Its net income, EPS of its Class A shares, and EPS of its Class B shares rose to $74.9 million, $1.28, and $1.90, respectively, in fiscal 2016. That compares to $71.9 million, $1.23, and $1.83, respectively, in fiscal 2015.

GEF’s cash and cash equivalents and inventories fell 2.4% and 6.6%, respectively, in fiscal 2016. Its current ratio fell to 1.4x in fiscal 2016 compared to 1.6x in fiscal 2015.

Greif expects EPS for its Class A shares to be $2.78–$3.08 before special items in fiscal 2017.

Next, let’s take a look at Domtar Corporation (UFS).

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.