Bank of America upgrades Greif (GEF +2.6%) to a Purchase ranking from Underperform because it factors to indicators of enhancing containerboard fundamentals.
Containerboard pricing breakdown: “Whereas there’s optimism there may be a fall price hike, for now we mission a (partial) improve to be carried out someday in 2H21 (50% of a $50/ton improve) however anticipate the stocks to nonetheless profit from a number of enlargement in anticipation of higher traits. Meantime, GEF, Graphic Packaging (GPK, Purchase), and WestRock (WRK, Purchase) are pushing for a coated recycled board price improve (WRK and GPK at $35/ton; GEF at 4-7% [or ~$33-58/ton]), efficient in October. Elevated demand was cited as the first driver of the rise. Our models have been assuming a $20/ton decline in CRB costs via year-end, so ought to costs merely maintain (not to mention improve) this might provide upside to our forecast.”
BofA will increase its price goal on Greif to $46 vs. the typical Wall Street price goal of $40.33.