On Mar 15, we issued an updated research report on Greif, Inc.GEF .
After posting robust first-quarter fiscal 2017 results, Greif reaffirmed its fiscal 2017 earnings per share guidance range between $2.78 and $3.08. Compared to the adjusted EPS of $2.44 in fiscal 2016, the guidance range for fiscal 2017 indicates year-over-year growth in the range of 14-26%. The company also expects to benefit from its Transformation plan.
Greif remains focused on process stability, process reliability and process predictability. The company is also trying to reduce unplanned downtime which will improve its maintenance and operating capabilities.
Greif has implemented a strategy to enhance its business portfolio, address under-performing assets and generate additional cash. This strategy includes selling, general and administrative ("SG&A") reductions throughout the company and rationalization of manufacturing facilities.
Greif has been successful in fixing under-performing businesses. The company has divested non-core assets and closed facilities which will drive long-term performance. During fiscal 2016, Greif completed four divestitures. These divestitures were of non-strategic businesses, three in the Rigid Industrial Packaging & Services segment and one in the Flexible Products & Services segment.
However, Greif's fiscal 2017 results will be affected by sluggish global industrial economy, a strengthening U.S. dollar, soft containerboard prices and weaker-than-expected seasonal agricultural sales.
Further, plunging oil prices have a direct impact on demand for industrial packaging in the energy sector. A number of energy producers had cut exploration and production activities in response to the sharply declining oil prices, especially the North-America focused smaller companies. Lower oil prices are also affecting the cost of Greif's raw materials.
Greif currently carries a Zacks Rank #3 (Hold).
Share Price Performance
In the last one year, Greif has outperformed the Zacks classified Containers-Metal/Glass sub-industry with respect to price performance. The stock gained around 78.3%, while the industry rose 12.8% over the same time frame.
Stocks to Consider
Some better-ranked stocks in the sector include Net 1 UEPS Technologies, Inc. UEPS , Casella Waste Systems, Inc. CWST and ACCO Brands Corporation ACCO . All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
UEPS Technologies has a positive average earnings surprise of 14.10% for the last four quarters. Casella Waste generated a remarkable positive average earnings surprise of 165.21% over the trailing four quarters. ACCO Brands has delivered an average positive earnings surprise of 24.74% in the past four quarters.
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