While we acknowledge an elevated leverage position, we believe GPK maintains visibility to de-lever to ~3.0x by the end of 2023 given both EBITDA growth and strong FCF generation. “Given the non-durable nature of GPK's primary end markets, which should render volumes resilient in an economic slowing, we see the company as favorably positioned heading into ,” Hajde wrote to clients. “Given our bias for lower cboard pricing, a lack of confidence in operational execution, and an overhang from Ilim (Russian 50:50 JV) we believe it will be challenging for the stock to work over the 6-12 months.”Īlongside the downgrade to a Hold-equivalent, Hajde reduced his price target to $47 from a prior $58.īy contrast, estimates for Graphic Packaging ( GPK) were increased due to better pricing dynamics in paperboard and strong execution ability shown by management amid an uncertain environment. Conquest Coated Recycled Folding Carton Board is the ideal solution for a wide variety of.

A double clay-coated surface provides a clean surface for high-quality graphics. “Simply put, our bias has shifted towards the downside for pricing, even with a potential pickup in exports on account of energy instability in Europe (particularly as the European economy navigates a potential impending recession as well),” Hajde explained. Conquest Coated Recycled Folding Carton Board provides a superior printing surface that is engineered to deliver excellent print results and a cleaner running press. As such a downgrade of International Paper ( IP) from “Overweight” to “Equal Weight” is appropriate in Hajde’s view. “Looking forward, high frequency data suggests consumers have remained generally resilient, but we are inclined to think consumption patterns may change given a slowing economy, a looming deadline for the 26+ month holiday on student loan repayments, and acute inflation.”Īmid these contrasting dynamics, International Paper ( NYSE: IP) and Graphic Packaging Holding Company ( NYSE: GPK) were rated at the more pessimistic and optimistic ends of assessments, respectively.įor the former, current export dynamics mirroring the close of recent containerboard pricing cycles was cited as a signal that domestic containerboard prices are breaking down. “Broadly speaking, we believe Q2 showed still-strong demand for at-home food/beverage related packaging,” Equity analyst Gabe Hajde explained. Overall, the bank indicated optimism on Q2 results broadly, but noted the escalation of foreign exchange and inflation impacts as issues constraining results. Wells Fargo updated its assessments of packaging and container companies ahead of a busy earnings season, naming its top pick and reducing its outlook elsewhere. Graphic Packaging Partners with Cranswick PLC to Commercialise new OPRL-Approved, Recyclable PaperLite Pack for Tesco PLC.

IP will also receive a 20.5 percent ownership interest valued at USD 1.14 billion in a subsidiary of Graphic Packaging that will hold the assets for the combined business.Foto-Video-Studio/iStock via Getty Images IP plans to use USD 660 million in cash proceeds from a loan being assumed by Graphic Packaging to pay down existing debt. Merchandising displays, specialty packaging, eCommerce and fulfillment solutions for consumer packaged goods and retailers. The transferred business includes approximately 3,900 employees, two coated paperboard mills and three converting facilities in the U.S., along with one converting facility in the U.K.Įarlier, in October 2017, International Paper signed a definitive agreement to contribute its North America Consumer Packaging business to Graphic Packaging in a transaction valued at $1.8 billion. International Paper (IP) will further reduce its partnership interest in US company Graphic Packaging International Partners (GPI). IP now holds a 20.5 percent ownership interest in the subsidiary of Graphic Packaging that holds the assets of the combined business. As a result of the transaction, Graphic Packaging has assumed USD 660 million of IP debt. International Paper announced on Januthat it has completed the transfer of its North America Consumer Packaging business to Graphic Packaging.

in a transaction valued at USD 1.8 billion. combines its North America consumer-packaging business with Graphic Packaging Holding Co. Earlier, in October 2017, International Paper signed a definitive agreement to contribute its North America Consumer Packaging business to Graphic Packaging in a transaction valued at $1.8 billion.

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