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Greif (GEF) Hikes Prices for Uncoated Recycled Paperboard

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Greif, Inc. GEF is implementing price hikes of $50 per ton for all grades of uncoated recycled paperboard (URB). The price rise of new orders will be effective relating to the shipments on or after Jul 26.

Greif is executing price-increase actions in response to the continuous inflationary cost pressure in production and transportation as well as robust demand across the company’s paperboard network. It is witnessing rising cost of raw materials used in the paper making process as well as higher old corrugated container costs. However, the company’s price-increase actions to combat cost inflation is likely to aid margins.

The company is gaining from the surging demand from food, pharmaceutical and household goods industries owing to the COVID-19 pandemic. The industrial sector has been witnessing pick-up in activity for the past few months on resumption of global economic activities. Considering these, Greif anticipates adjusted earnings per share to lie between $4.55 and $4.85 in fiscal 2021. The mid-point of the guidance indicates a year-over-year improvement of 46%.

Greif will continue benefiting from focus on operational execution, capital discipline, and a robust and diverse product portfolio. The company has initiated a number of cost-reduction plans, which include plant rationalization, furloughs and shift reductions that will boost margins. Its ongoing restructuring activities that include optimizing and integrating operations in the Paper Packaging & Services segment, rationalizing operations and closing underperforming assets in the Global Industrial Packaging segment will likely aid savings.

Share Price Performance

Greif’s shares have appreciated 31.2% so far this year, outperforming the industry’s growth of 8.8%.

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Zacks Rank & Other Stocks to Consider

Greif currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

A few other top-ranked stocks in the Industrial Products sector are Tennant Company TNC, Encore Wire Corp. WIRE and Arconic Corp. ARNC. All of these stocks sport a Zacks Rank #1, at present.

Tennant has an anticipated earnings growth rate of 49.5% for 2021. The company’s shares have gained around 18%, year to date.

Encore Wire has an estimated earnings growth rate of 49.5% for the ongoing year. Year to date, the company’s shares have rallied nearly 36%.

Arconic has a projected earnings growth rate of 447% for the current year. The stock has appreciated around 21%, so far this year.

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Greif, Inc. (GEF) : Free Stock Analysis Report

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