Graphic Packaging Holdings: Industry Shelf-Defeating Prophecy: Tons In, Pricing Power Out; Initiate with a Neutral rating

研报英文原文证据摘录

Graphic Packaging Holdings: Industry Shelf-Defeating Prophecy: Tons In, Pricing Power Out; Initiate with a Neutral rating

cordingly, we initiate on GPK with a Neutral Q3 383 302 344

Q4 311 280 285

recommendation and set a 31 December 2027 price target of $11.7/share. FY 1,395 1,044 1,224

• Low cost operator with a well invested asset base. On virtually every metric, Style Exposure

GPK appears to be well invested and low on the cost curve relative to peers.

Evidence of this can be seen through better-than-peer margins in every period

that we are able to track. Furthermore, after a mill portfolio restructuring, GPK

has a heavier exposure to the faster growing grades within boxboard which

should enable it to grow above the market over the long term. However, our

work suggests that market demand will remain muted.

• Despite significant consolidation, volume growth and pricing power is

lacking. In each of the grades that GPK produces, the market is heavily

consolidated. Considering that this is a consolidated market, we would expect

some pricing power and a net price/cost tailwind through the cycle. However, Catalyst Watch is our short-term conviction

more often than not, pricing falls short of covering fixed and variable cost

indicator for our coverage universe. It is

inflation (even in periods when industry-wide operating rates are healthy).

an optional indicator our research analysts

Furthermore, our end market analysis suggests that volume growth from here

can apply to a stock in their coverage into

will be low (0.3% CAGR to 2028), which will make it difficult to offset margin

a specific event in order to articulate short

pressures through improved operating leverage.

term positivity or caution based on near-

• Market is over-supplied.