Last Update 19 Feb 26

Fair value Increased 7.86%

GEF: Beverage Can Demand And Cash Deployment Will Shape Future Risk Balance

Analysts have lifted their Greif price targets, with one moving to $74 and another to $79, citing cautious expectations for packaging volumes, support from beverage can growth, and disciplined containerboard pricing.

Analyst Commentary

Recent research on Greif focuses on how the company might balance its recent portfolio changes with a packaging demand outlook that is described as modestly challenged, while still supporting higher valuation targets.

Bullish Takeaways

Bullish analysts raising targets into the mid to high US$70s point to confidence that Greif can execute through a period of limited packaging promotions, rather than relying on a strong volume rebound.
Commentary highlighting ongoing growth in beverage cans in North America and Europe supports the view that Greif is linked to end markets that still have room to expand volumes, which can help underpin revenue stability.
Expectations that containerboard producers can implement price increases through disciplined supply management are seen as a support for industry pricing, which can help earnings quality and justify higher multiples.
The decision to lift targets while keeping more neutral stock ratings suggests analysts see valuation as closer to fair value, yet still supported by the company’s capital allocation options following the containerboard business sale.

Bearish Takeaways

Comments pointing to modestly challenged packaging volumes into early 2026, driven by limited promotions, signal that top line growth may be constrained and could cap upside for earnings and valuation.
References to a Hold or Neutral stance, despite higher targets, indicate that some analysts see risk of execution slippage if volume softness lasts longer than expected or if pricing gains become harder to sustain.
Uncertainty around how Greif will deploy funds from the containerboard asset sale is a key watchpoint, as investors are waiting to see whether management prioritizes debt reduction, shareholder returns, or further acquisitions.
The reliance on disciplined supply management for containerboard pricing leaves room for caution, as any shift in industry behavior could pressure margins and challenge the higher valuation frameworks analysts are using today.

What's in the News

Greif declared a quarterly cash dividend of US$0.83 per share on its Class B common stock, payable on January 1, 2026, to stockholders of record as of December 18, 2025 (Key Developments).

Valuation Changes

Fair Value: The updated company fair value has risen from $73.80 to $79.60, a moderate increase of about 7.9%.
Discount Rate: The discount rate has moved slightly lower from 7.35% to 7.30%, indicating a small change in the required return used in the model.
Revenue Growth: Assumed long term revenue growth has been reduced from 2.68% to 1.27%, representing a sizeable step down in the top line outlook.
Net Profit Margin: The assumed net profit margin has shifted marginally lower from 6.62% to 6.48%, reflecting a modest compression in expected profitability.
Future P/E: The future P/E multiple has increased from 13.67x to 18.47x, indicating a substantial uplift in the valuation multiple applied to earnings.

Refocusing on high-value markets and polymer packaging, paired with operational efficiencies, positions Greif for enhanced margins and long-term revenue growth.
Emphasis on sustainability and disciplined capital allocation aligns with regulatory trends and supports premium pricing and future earnings expansion.
Divesting profitable segments and escalating focus on cyclical, regulated markets heightens Greif's exposure to volatility, execution risk, and competitive pressures, threatening long-term stability.

Catalysts

About Greif

Engages in the production and sale of industrial packaging products and services worldwide.What are the underlying business or industry changes driving this perspective?

The strategic divestment of Greif's lower-margin containerboard and timberland businesses is sharpening its focus on markets poised for structural growth-such as polymers and high-value industrial sectors-enabling improved capital efficiency and margin expansion, which should boost long-term net margins and free cash flow.
Greif's aggressive cost optimization program-including SG&A reduction, operational efficiency improvements, and network rationalization-has already driven improved gross and EBITDA margins, and as volume recovers, the operating leverage from these actions is expected to drive outsized future earnings growth.
The company's investment and expansion in polymer-based packaging (with strong end-market demand in agrochemicals, pharma, food & beverage, and flavor & fragrance) directly positions Greif to benefit from the ongoing expansion of global manufacturing, logistics, and e-commerce, supporting sustainable top-line revenue growth.
By emphasizing recyclability, reusable packaging, and life-cycle management solutions, Greif is well aligned with the growing customer and regulatory focus on sustainability and circular economy practices, which should promote increased sales and support premium pricing, positively impacting both revenue and net margin.
The company's strong balance sheet after asset sales and its disciplined capital allocation toward high-return organic investments or M&A in value-added services create additional levers for long-term earnings and revenue growth.

Greif Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Greif's revenue will decrease by 9.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 2.6% today to 8.1% in 3 years time.
Analysts expect earnings to reach $327.0 million (and earnings per share of $5.23) by about September 2028, up from $140.7 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.0x on those 2028 earnings, down from 20.3x today. This future PE is lower than the current PE for the US Packaging industry at 22.2x.
Analysts expect the number of shares outstanding to grow by 0.68% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.09%, as per the Simply Wall St company report.

Greif Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The divestment of the containerboard and timberland businesses removes a profitable and cash-generating segment (containerboard contributed $218 million in trailing 12-month EBITDA), reducing revenue diversification and increasing Greif's exposure to more cyclical and potentially lower-growth core packaging markets, which may impact long-term revenue growth and EBITDA stability.
Ongoing volume softness in key segments (e.g., industrial metals, large drums, fiber products), sluggish demand in North America and EMEA, and cautious customer sentiment suggest persistent macro headwinds; a prolonged industrial downturn could suppress long-term sales volumes and revenue growth, with recovery timing uncertain and dependent on external economic factors.
Increased strategic focus on polymers and targeted end-markets (Food & Bev, Agrochemical, Pharma) raises execution risk if these end-markets underperform, face heightened regulation, or experience technological disruption (e.g., anti-plastics regulation); this could expose Greif to volatility and margin pressures if demand in these markets stagnates or declines.
The company's aggressive cost-cutting and portfolio optimization may yield diminishing returns over time, especially if underlying demand remains weak; future gross margin and earnings growth could be constrained if structural cost-saving opportunities are exhausted ahead of a volume rebound.
Intensifying industry competition, especially from low-cost producers and innovative entrants in sustainable packaging, along with ongoing regulatory changes (e.g., EPR, recycling mandates), could erode market share and compress margins, increasing risk to long-term revenue and net margin expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $75.8 for Greif based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $93.0, and the most bearish reporting a price target of just $68.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.0 billion, earnings will come to $327.0 million, and it would be trading on a PE ratio of 14.0x, assuming you use a discount rate of 8.1%.
Given the current share price of $60.23, the analyst price target of $75.8 is 20.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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