GPK Stock Forecast & Price Target

Graphic Packaging Holding Co (GPK) is experiencing flat to slightly increasing volume growth, supported by its tuck-in acquisition strategy, which aims to expand into growth categories and regions. The company is expected to enhance productivity, leading to significant financial metrics such as 5-6% EBITDA growth, 10% free cash flow growth, and double-digit earnings per share growth, even in a flat volume environment. Additionally, GPK has the ability to counter rising commodity input costs through price adjustments and improved performance dynamics, contributing to its stable pricing and margins compared to competitors in the containerboard sector.

Graphic Packaging Holding Co has revised its EBITDA projections downward for Q3, FY25, and FY26 to $380 million, $1.435 billion, and $1.5 billion, respectively, reflecting continued soft volumes in the food sector and ongoing price and cost pressures. Recent sales data indicates a decline in food unit sales and a concerning trend of flat to declining volumes in key product categories, which, combined with challenges from inflation and an oversupply of bleached paperboard, negatively impacts pricing power. Additionally, higher capital expenditure requirements are likely to extend the company’s deleveraging timeline and restrict potential capital returns, posing further risks to future free cash flow estimates.