Greif (GEF): Valuation Perspectives After Share Buyback Proposal and Latest Earnings Update

Greif (GEF) just announced that its Board of Directors is considering a share repurchase program that could see up to $150 million used to buy back 2.5 million common shares. This potential move follows the company’s recent earnings report and signals active steps to return value to shareholders.

See our latest analysis for Greif.

Greif’s share price has shown some volatility in recent months, with short-term upticks such as a 3.7% gain over the past week. However, broader sentiment remains cautious as its one-year total shareholder return stands at -11.8%. The recent buyback proposal and robust earnings figures could signal a commitment to supporting long-term value, suggesting that momentum may be building after a period of muted returns.

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With analyst targets placing Greif’s stock at a significant discount to its current price, and recent earnings outpacing expectations, the question remains: is this a compelling entry point, or is the market already reflecting future potential?

Most Popular Narrative: 20.3% Undervalued

Greif’s fair value is estimated at $73.8, compared to its last close of $58.85. This signals a significant gap, setting expectations for further upside if the narrative’s projections hold true.

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. This enables improved capital efficiency and margin expansion, which should boost long-term net margins and free cash flow.

Read the complete narrative.

Curious what big assumptions are behind Greif’s valuation reset? Hints: it’s not just about cost-cuts, but bold revenue, margin, and profit leaps that could rewrite the company’s story. Want to see the full picture? Dive deeper to uncover the projections behind this fair value call.

Result: Fair Value of $73.8 (UNDERVALUED)

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

However, persistent sluggish demand in key segments and uncertainty around replacing earnings from recent divestitures could test Greif’s positive fair value outlook.

Find out about the key risks to this Greif narrative.

Another View: What Do Price Ratios Say?

While fair value estimates suggest Greif is undervalued, looking at its price-to-sales ratio shows a more nuanced picture. The company trades at 0.7x sales, which is higher than its peer average of 0.6x but lower than the US Packaging industry average of 0.9x. Compared to the fair ratio of 0.9x, the gap suggests the stock is not without valuation risk, even if there is room for upside. Are current expectations overlooking something, or does this present a subtle opportunity?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Greif Narrative

If you see things differently or want to dig into the numbers on your own terms, you can craft and share your perspective in just minutes with 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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