Market Overview

Earnings Preview for Greif

Greif (NYSE: GEF) will be reporting its second-quarter fiscal 2011 results tomorrow, June 8, after the closing bell. Analysts are looking for the container maker to post earnings of $0.96 per share on revenues of $1.0 billion. That is up from $0.86 per share and $836.6 million in the same period of last year. The consensus earnings estimate was $1.00 per share 60 days ago.

Looking Ahead

So far, analysts expect to see year-over-year growth of both earnings and revenues in the third quarter, as well as earnings up 7.6% and revenues up 20.4% for the full fiscal year. Note that analysts have underestimated Greif's earnings in four of the past five quarters, but EPS fell short by 4 cents in the first quarter.

The Company

Ohio-based Grief makes and sells industrial packaging products, as well as containerboard and corrugated products, worldwide. Also, its Land Management segment engages in harvesting and regenerating timber properties. Other segments include Rigid Industrial Packaging and Services, Flexible Products and Services, and Paper Packaging.

The company announced in April that President David B. Fischer would become chief executive at the start of fiscal 2012. Current CEO Michael J. Gasse will continue in his role as executive chairman.

Performance

Greif has a dividend yield of 2.6%. The 13.9 price-to-earnings ratio is less than the industry average, but the 1.6 price/earnings-to-growth ratio suggests overvaluation. Yet analysts on average recommend buying GEF and have for more than 90 days. Their mean price target (where they predict the share price is headed) is $74.00 per share.

The share price has risen about 18% over the past year and ended Monday at $63.79. Year to date, though, the stock has underperformed the industry average and the broader markets.

Posted-In: David B. Fischer Greif Michael J. GasseEarnings Long Ideas Short Ideas Previews Trading Ideas

 

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