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Investing.com - Wells Fargo (NYSE:WFC) raised its price target on Greif Inc. (NYSE:GEF) to $76.00 from $72.00 on Thursday, while maintaining an Overweight rating on the stock. Currently trading at $67.93, near its 52-week high of $73.16, the stock has delivered a solid 13.17% return year-to-date. According to InvestingPro’s Fair Value analysis, the stock appears fairly valued.
The investment bank expects Greif’s fiscal third-quarter results to be "noisy" due to the pending containerboard asset sale, which is expected to move to discontinued operations, though underlying results remain stable. With earnings scheduled for August 27 and a P/E ratio of 15.23, investors will be closely watching the company’s performance.
Wells Fargo noted that Greif’s management is executing on its "Build to Last" plan and will end fiscal year 2025 with an under-leveraged balance sheet, potentially leading to an active fiscal year 2026.
The firm highlighted Greif’s recent portfolio moves as the key focus for the fiscal third quarter, including the announced sale of containerboard assets on July 1 and timberland assets on August 6.
Wells Fargo expects Greif’s management to emphasize progress on the "Build to Last" plan, which includes shifting the portfolio toward faster-growing, higher-margin, and less capital-intensive areas, while industrial end markets remain sluggish.
In other recent news, Greif Inc. announced the divestiture of its containerboard business to Packaging (NYSE:PKG) Corporation of America for $1.8 billion in cash. This transaction includes two containerboard mills and eight sheet feeder and corrugated plants in the United States, generating approximately $1.2 billion in sales and $212 million in EBITDA for the year ending April 30, 2025. BofA Securities downgraded Greif’s stock from Buy to Neutral, citing the divestiture’s expected 20% dilutive impact before reinvestment of proceeds. Truist Securities, however, raised Greif’s stock price target to $72, maintaining a Hold rating, following the company’s second-quarter Class A operating earnings per share of $1.19, which exceeded analyst expectations. Greif’s Customized Polymer Solutions and Integrated Solutions sectors outperformed forecasts, while other sectors met projections. The company’s ongoing Soterra timberland sales process is reportedly progressing well. Greif held a conference call with investors to discuss the divestiture, though specifics on terms and timing were not disclosed.
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