Greif (GEF:NYS) Fundamental Valuation Report

Fundamental Valuation Report


Consumer Cyclical:Packaging & Containers

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Close Price/Date
$37.11 (USD) 31/12/2018

Weighted Valuation
$57.73 (USD)

Overall Rating
Undervalued by 55.6%

Valuation Models Analyst Consensus: $65.95 (USD)
(in order of importance) Discounted Cash Flow: $46.79 (USD)
Comparables: $54.94 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (GEF:NYS USD)

Price 37.11
Range 35.65 – 37.11
52 week 32.32 – 62.20
Open 35.76
Vol / Avg. 266885/343658
Mkt cap 1.94B
P/E 15.24
Div/yield 1.70/0.03
EPS 3.55
Shares 58.95M
Beta 1.30

Company Description

Greif Inc is a producer of industrial packaging products and services with manufacturing facilities located in over many countries. It offers a comprehensive line of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, blending, filling, logistics, warehousing, and other packaging services. The company operates in four reportable business segments including Rigid Industrial Packaging and Services from which it earns the majority of the revenue, Paper Packaging, Flexible Products and Services and Land Management.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for GEF:NYS

Using a discounted cash flow model we generated an intrinsic value of $46.79 (USD) for GEF:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

GEF:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $46.79 1% 5% 1% 5%
WACC (or Ke) 11.07 $56.27 $39.40
Terminal Growth Rate 3.00 $40.36 $55.03
Tax Rate 0.24 $51.92 $41.65
Cash Flow 613,552,300 $42.33 $51.24
Capital Expenditures -120,520,000 $46.01 $47.56
Long Term Debt 1,114,100,000 $47.73 $45.84

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $54.94 (USD) for GEF:NYS. We also generated a valuation of $52.51 (USD) using other metrics and comparables.
The comparable companies were Berry Global Group (BERY:NYS), Bemis Co (BMS:NYS), Crown Holdings (CCK:NYS), Silgan Holdings (SLGN:NAS) and Sonoco Products (SON:NYS).

Company GEF:NYS End Date Value
Earnings/Share $3.55 (USD)
Book Value/Share $18.79 (USD)
Sales/Share $65.68 (USD)
Cash Flow/Share $4.29 (USD)
EBITDA/Share $8.10 (USD)
Price Based on Comps Adjustment Factor (%)
$70.45 (USD) -2.4
$73.82 (USD) -34.1
$52.21 (USD) -20.8
$19.84 (USD) 28.2
$90.45 (USD) -5.6
10.45 PE Ratio 19.84 12.95 37.62 18.56 7.95 22.14
1.97 PB Ratio 3.93 4.36 3.52 5.97 2.87 2.93
0.57 PS Ratio 0.79 0.82 1.02 0.52 0.60 1.01
8.65 PCF Ratio 8.22 6.40 10.95 6.96 6.47 10.32
5.77 EV to EBITDA 11.17 9.18 18.81 9.44 8.80 9.60


Using a multiples approach we generated a valuation of  $59.47 (USD) for GEF:NYS

Company GEF:NYS End Date Value
Earnings/Share $3.55 (USD)
Book Value/Share $18.79 (USD)
Sales/Share $65.68 (USD)
Cash Flow/Share $4.29 (USD)
EBITDA/Share $8.10 (USD)
Price Based on Comps Adjustment Factor
$91.97 (USD) 0
$44.50 (USD) 0
$44.40 (USD) 0
$41.93 (USD) 0
$74.55 (USD) 0
Ratios Ratio Average
PE Ratio 25.91
PB Ratio 2.37
PS Ratio 0.68
PCF Ratio 9.77
EV to EBITDA 9.20

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  GEF:NYS for the last 10 years was  2.39

We ran the Adjusted Book Value for  GEF:NYS and generated a book value of  $18.79 (USD)
By multiplying these we get an adjusted valuation of  $44.87 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for GEF:NYS. The 2 analysts have a concensus valuation for GEF:NYS for 2019 of $65.95 (USD).


Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 0 5.0000 Buy 2018-12-31

Current Price: 37.11 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 3.77 4.21
# EPS Analysts 1 1
Mean Revenue 3,998.00 4,138.90
# Revenue Analysts 1 1
Mean Target Price 65.95
Mean Cash Flow 12.86 16.05
Mean EBITDA 547.00 585.50
Mean Net Income 222.00 248.00
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate 10.00
Mean Capital Expenditure

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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