On Dec 27, Zacks Investment Research downgraded
), a provider of packaging services, to a Zacks Rank #5 (Strong
BALL CORP (BLL): Free Stock Analysis Report
GREIF INC (GEF): Free Stock Analysis Report
SEALED AIR CORP (SEE): Free Stock Analysis
SILGAN HOLDINGS (SLGN): Free Stock Analysis
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Why the Downgrade?
Although Greif's adjusted earnings improved 18.8% year over year
to 76 cents per share in the fourth-quarter fiscal 2013 (ended
Oct 31, 2013), it missed the Zacks Consensus Estimate of 80
Additionally, Greif reported free cash flow of $69.3 million in
the quarter against $98.4 million a year ago. The decrease was
due to lower cash from operating activities, higher capital
expenditures and timberland purchases.
Greif expects the rigid industrial packaging business to be hurt
by challenging market conditions due to the delayed agricultural
season in Europe and North America. Its flexible products
business will also be negatively impacted by risks from the new
For 2014, Grief expects capital expenditure of around $153
million, slightly higher than 2013. For the full year, the
company will focus on safety in all its facilities and
work-related activities, while modest sales volume improvement
and slightly higher raw material costs will hurt top-line growth.
Moreover, foreign exchange volatility and social and political
unrest remain headwinds for the upcoming quarters.
Following the fourth-quarter earnings announcement, Greif's Zacks
Consensus Estimate for 2014 has gone down 10% to $3.13 per share.
Likewise, the Zacks Consensus Estimate for 2015 dropped 6% to
Other Stocks to Consider
Better-ranked stocks in the packaging industry include
Sealed Air Corporation
Silgan Holdings Inc.
). While Sealed Air sports a Zacks Rank #1 (Strong Buy), Ball
Corporation and Silgan Holdings carry a Zacks Rank #2 (Buy).