Greif (GEF) Valuation Check After Executive Share Sales and Shifting Investor Sentiment

Greif (GEF) is back on investors’ radar after reports of executive share reductions, a move that can quickly sway sentiment even when the underlying business and recent recognition for corporate responsibility look relatively steady.

See our latest analysis for Greif.

Those executive share sales hit just as sentiment had been improving, with a roughly 14% one month share price return and an 8% year to date share price gain, in contrast with a slightly negative one year total shareholder return. This suggests momentum is rebuilding but still fragile.

If this shift in mood around Greif has you reassessing your watchlist, it could be a good moment to scout other industrial names via fast growing stocks with high insider ownership.

With Greif trading below analyst targets but boasting strong multi year returns and surging net income, is the market underestimating its earnings power, or is it already pricing in the next leg of growth and leaving limited upside?

Most Popular Narrative: 9.8% Undervalued

Greif's most followed narrative sees a fair value above the recent 65.45 share price, framing the stock as modestly mispriced rather than a deep bargain.

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.

Read the complete narrative.

Want to see what justifies a higher valuation on a slow growing top line? The real twist lies in how profit margins and earnings are expected to evolve, and the lower future earnings multiple this narrative still assumes. Curious how that combination adds up to an undervalued call rather than an aggressive stretch?

Result: Fair Value of $72.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that call leans heavily on execution, with prolonged industrial softness or missteps in polymer expansion both capable of derailing the margin driven upside story.

Find out about the key risks to this Greif narrative.

Another Lens on Value

While the narrative frames Greif as about 10% undervalued versus analyst targets, our SWS DCF model paints a far more dramatic picture, suggesting the shares trade roughly 73% below fair value. If both views are looking at the same cash flows, which one is misreading the risk?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Greif Narrative

If you are not sold on this take or would rather dig into the numbers yourself, you can craft a custom view in minutes using Do it your way.

A great starting point for your Greif research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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