Graphic Packaging Holding Co (GPK): what the price requires

Generated: 2026-07-19 · Source: https://boothcheck.com/report/GPK

Headline

Field	Value
Ticker	GPK
Company	Graphic Packaging Holding Co
Current price	$10.34/sh
Composition	United States 69% / International 31%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin needed	3.5%
Operating margin today	7.7%
Margin compression implied	-4.2pp
Multiple paid	14x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 4.9% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~6.2%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.45σ
cohort percentile (of 74 peers)	27
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	1.06x	4	expensive
Earnings	0.93x	4	justifies
Relative	0.88x	3	justifies
Growth	0.32x	4	justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.6%); the inversion above states its own rate.

Per-Model Detail (n=15)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$77.97	0.13x	yes	FCF base $0.9B, growth -0% (input: historical growth), terminal g 0.5%, WACC 3.6%, 5yr projection
DCF Exit Multiple	Growth	$22.48	0.46x	yes	Exit EV/EBITDA: 5.9x / 7.9x / 9.9x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$11.81	0.88x	yes	P/E 14x (static sector reference · 2026-04), scenarios: 11.8x / 14.0x / 16.2x (bear / base = reference held flat / bull), EV/EBITDA 8x
Simple DDM	Growth	$57.65	0.18x	yes	DPS $0.43, g=8.4% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDM	Growth	$0.30	34.45x	yes	Stage 1: -60% for 5yr, Stage 2: 3.5% perpetual (excluded from median)
Simple Excess Return	Asset	$9.98	1.04x	yes	BV/sh $10.94, ROE (TTM) 8.4%, ke 9.3%
Two-Stage Excess Return	Asset	$9.53	1.08x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$6.86	1.51x	yes	Rev $8.7B, growth -0% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.4x / 0.4x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/E	Relative	—	—	no	—
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$49.18	0.21x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.92B × (1−21%) / WACC 3.6% → EPV (no growth)
Residual Income	Asset	$9.46	1.09x	yes	BV $10.94 + 5yr PV of (ROE (TTM) 8.4% − Kₑ 9.3%) × BV; BV grows 5.5%/yr
Graham Number	Asset	$15.05	0.69x	yes	√(22.5 × EPS $0.92 × BVPS $10.94) — Graham's conservative floor
EV/EBITDA Relative	Relative	$10.74	0.96x	yes	EBITDA $1.15B × sector EV/EBITDA 8.0x
FCF Yield	Earnings	$12.71	0.81x	yes	FCF $902.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$0.77	13.42x	yes	EPS $0.92 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$0.49	21.09x	yes	BV $10.94 × (ROIC 0.2% / WACC 3.6%) (excluded from median)
P/Sales Sector	Relative	$43.75	0.24x	yes	Revenue $8.65B × sector P/S 1.5x
PEG Fair Value	Relative	—	—	no	—
Earnings Yield	Earnings	$9.95	1.04x	yes	EPS $0.92 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$6.2b
Net debt / NOPAT (after-tax)	11.83x
Net debt / operating income (pre-tax)	9.34x
Interest coverage	3.0x
Share count CAGR (buyback)	-1.1%
Burning cash	no

Bullet Takeaways

• The surprising part is how tightly the methods agree this is fairly valued, not cheap. At about $10.72 the relative, EV/EBITDA, asset, and free-cash-flow methods all cluster between roughly $9.50 and $12.71, with a central blended read near $11.81, so the market is paying close to what the steady-state business is worth.
• Pricing is the problem, not volume. First-quarter revenue rose 2% to $2.156 billion on higher volumes and innovation sales, but a 2% price decline eroded about $32 million from the top line, and an oversupplied bleached-paperboard market cost roughly $46 million of EBITDA.
• Leverage is meaningful. The company carries about $6.4 billion of gross debt with interest coverage near 2.6x, which is why the deleveraging timeline and the pricing environment matter as much as the operating beat.

Bull Case

The most counterintuitive finding in the data is that a consumer-packaging company trading at barely over $10 is not a deep-value bargain at all; it is a fairly valued business where almost every method lands near the price. The relative method sits at $11.81, the EV/EBITDA method at $10.74 (June 27, 2026), the asset-based methods between $9.46 and $9.98, and the free-cash-flow method at $12.71, all clustered around the $10.72 price with a central blended read near $11.81. That tells you the market is pricing the business correctly for what it currently earns, which means the bull case is not "this is mispriced and cheap" but "this is a stable cash generator whose self-help initiatives could lift the earnings the methods are pricing."

The operating engine is steadier than the low share price suggests. First-quarter revenue rose 2% to $2.156 billion, driven by higher volumes, innovation sales, and favorable foreign exchange, and adjusted EPS of $0.09 beat the $0.06 consensus. The FY2025 10-K attributes International Paperboard Packaging net sales growth to "innovation sales growth driven by conversions to the Company's sustainable consumer packaging solutions, higher packaging volumes and favorable foreign currency exchange" (FY2025 10-K, accession 0001408075-26-000009), which is the structural tailwind: brand owners moving from plastic to fiber-based packaging. That conversion demand is the volume story that offsets the pricing pressure.

The self-help is where the upside sits. Following a comprehensive 90-day business review, management announced over 500 job cuts and efficiency initiatives, reaffirmed full-year guidance, and guided to Q2 through Q4 EPS of $0.23 to $0.36, well above the first-quarter run rate. The stock surged on the combination of the operating beat and the streamlining plan. Management also reaffirmed its 2026 cash-flow targets, and the roughly 4.7% dividend yield is supported by that cash generation. For a buyer who believes the cost actions land and the paperboard cycle eventually stabilizes, the methods that cluster near $11 today would migrate higher as the cost savings flow through, and the dividend pays you to wait.

Bear Case

The structural truth a holder has to face is that GPK is cheap for a reason that is actively getting worse: it cannot outprice the overcapacity in its core paperboard market. The bleached-paperboard market is oversupplied, which cost roughly $46 million of EBITDA in the quarter, and the company took a 2% price decline that erased about $32 million from revenue even as volumes grew. A packaging producer that grows units but loses on price is running to stand still, and in an oversupplied commodity market that dynamic does not fix itself quickly. The GAAP result was a net loss of $43 million, driven by restructuring charges, and the restructuring itself is the company acknowledging that the cost base has to shrink because pricing will not bail it out.

The balance sheet makes the pricing problem more dangerous. The company carries about $6.4 billion of gross debt with interest coverage near 2.6x, which is thin for a cyclical materials business. Analysts have flagged that the oversupplied paperboard market and rising capital expenditures will pressure pricing power and extend the deleveraging timeline, undermining the very free-cash-flow projections that support the dividend and the valuation. When leverage is elevated and the core market is in oversupply, the margin for error narrows: a deeper price war or a demand slowdown would push interest coverage lower and force a choice between the dividend, the deleveraging, and the capital program.

There is also a governance and disclosure overhang the price has not fully absorbed. The stock has drawn a wave of securities class-action filings and investigations alleging misleading disclosures around inventory, demand trends, and costs. Whatever the merits, that litigation is a distraction and a tail risk that sits on top of the operating challenges. The analyst consensus is a Hold for these reasons, with targets ranging from as low as $8 to as high as $28, a spread that reflects genuine uncertainty about whether the cost actions can offset the pricing erosion.

Valuation

GPK is a fairly-valued name on the methods, which is the key fact for framing both the upside and the risk. The methods that anchor to current economics cluster near the price: the relative method at $11.81, the EV/EBITDA method at $10.74, the simple and two-stage excess-return methods near $9.50 to $10, residual income at $9.46, and the free-cash-flow method at $12.71. A few methods print far higher, such as a perpetual-growth DCF near $76 and an earnings-power value near $48, but those extrapolate a normalized earnings level the current pricing environment does not support, and a couple print near zero on distorted inputs. The central blended read is about $11.81, just above the $10.72 price.

The inverted view is consistent with a value-supported, non-growth name. The price is characterized as supported by asset-based, earnings-power, relative-multiple, and growth-DCF value, with the embedded near-term operating assumption modest. In plain terms, the market is asking only that GPK hold its current economics, not that it grow, which is the right posture for a leveraged materials company in an oversupplied market.

The honest synthesis is that the stock is priced for the business as it is, which cuts both ways. There is no deep discount to exploit, so the upside depends entirely on the self-help working: if the 500-plus job cuts and efficiency initiatives lift EPS toward the guided $0.23 to $0.36 per quarter and the paperboard cycle stabilizes, the methods migrate higher and the dividend is the carry while you wait. The downside is that the pricing erosion and oversupply continue, leverage near 2.6x coverage limits flexibility, the class-action overhang lingers, and a stock that is merely fairly valued, not cheap, has little cushion if any of those break the wrong way.

Catalysts

The most important catalyst is execution on the cost program, where management announced over 500 job cuts after a 90-day business review and guided to Q2 through Q4 EPS of $0.23 to $0.36, well above the first-quarter run rate; evidence that the savings are landing is what would lift the earnings the methods price. The paperboard pricing environment is the dominant external catalyst, since an oversupplied bleached-paperboard market cost about $46 million of EBITDA and drove a 2% price decline; any stabilization or further deterioration in pricing moves the thesis directly. Volume and innovation are the offsetting driver, with brand-owner conversions to fiber-based sustainable packaging supporting volume growth even as pricing falls. Deleveraging is a standing catalyst given roughly $6.4 billion of gross debt and interest coverage near 2.6x, with analysts warning that overcapacity and higher capital spending could extend the timeline. The dividend, yielding about 4.7%, is a signal of management confidence in cash flow, and any change would be material. The securities class-action filings and investigations are a risk catalyst that could resolve in either direction. Sentiment is cautious, with a Hold consensus and a wide target range from about $8 to $28, so a clean demonstration that cost savings offset pricing pressure is what would narrow the debate.

Sources: Investing.com transcript, AlphaPilot, MarketBeat forecast, StockTitan 10-Q

Peer Cohorts (Per Segment, With Filing Citations)

Americas Paperboard Packaging / International Paperboard Packaging (reported)

• AMCR (AMCOR PLC)
• FY2025 10-K: …Inc., and Sonoco Products Company, and a variety of privately held companies. 8 Backlog Working capital fluctuates throughout the year in relation to business volume and other marketplace conditions. We maintain inventory levels that provide a reasonable balance between obtaining raw materials at favorable prices and…
• FY2025 10-K: …more than 40 countries. Se e Note 4 , " Acquisitions and Divestitures " f or more information on the Berry acquisition. Today, we are the global leader in developing and producing responsible consumer packaging and dispensing solutions across a variety of materials for nutrition, health, beauty and wellness…
• CCK (CROWN HOLDINGS, INC.)
• FY2025 10-K: U.S. dollar results by the current year average foreign exchange rates and then multiplying those amounts by the applicable prior year average exchange rates. NET SALES AND SEGMENT INCOME 2025 2024 Net sales $12,365 $11,801 Year ended December 31, 2025 compared to 2024 Net sales increased primarily due to $507 from…
• FY2025 10-K: …CUSTOMERS The Company's largest beverage can customers consist of many of the leading manufacturers and marketers of packaged consumer products in the world, including Anheuser-Busch InBev, Coca-Cola, Heineken, Keurig Dr Pepper, Molson Coors, Pepsi-Cola, and Refresco, among others. In addition to sales to Coca-Cola…
• PKG (PACKAGING CORP OF AMERICA)
• FY2025 10-K: …America. We operate ten mills and 91 corrugated products plants and related facilities. We are headquartered in Lake Forest, Illinois and operate in the United States. We report in three reportable segments: Packaging, Paper and Corporate and Other. For segment financial information see Note 19, Segment Information,…
• FY2025 10-K: …and Shipments" in "Part I, Item 1. Business" of this Form 10-K. We notified customers of a $70 per ton price increase for linerboard and medium effective March 1, 2026. Paper segment operating income was $130 million in 2025 and in 2024. Paper segment EBITDA excluding special items was $148 million in 2025, compared…
• BALL (BALL CORPORATION)
• FY2025 10-K: ; 25 Table of Contents Beverage Packaging, North and Central America ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ($ in millions) ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ $ 6,286 ​ $ 5,619 ​ $ 5,963 ​ Comparable operating earnings ​ ​ ​ 772 ​ ​ 747 ​ ​ 710 ​ Comparable…
• FY2025 10-K: …in 2025. Four companies currently manufacture substantially all of the aluminum beverage containers in the regions served by our beverage packaging, South America, segment. The company's South American beverage facilities shipped approximately 20 billion aluminum beverage containers in 2025. ​ Historically, sales…
• IP (INTERNATIONAL PAPER COMPANY)
• FY2025 10-K: …products industry. See Note 21 - Financial Information by Business Segment of Item 8. Financial Statements and Supplementary Data for further details regarding the Company's business segments. The majority of our business is focused on creating fiber-based packaging that protects and promotes goods, enables worldwide…
• FY2025 10-K: …products companies. We also compete, in some instances, with companies in other industries and against substitutes for wood-fiber products. Many factors influence the Company's competitive position, including price, cost, product quality and services. You can find more information about the impact of these factors on…
• SLGN (SILGAN HOLDINGS INC)
• FY2025 10-K: …are one of the most recycled packages in the world and are infinitely recyclable. We also believe that metal containers are generally more desirable than glass containers because metal containers are more durable and less costly to transport. We have increased our market share of metal food containers in the United…
• FY2025 10-K: EBIT excluding corporate expense). Since 1987, we have improved our market position for our custom containers business, with net sales increasing at a compound annual growth rate of approximately 5.3 percent. We manufacture custom designed and stock plastic containers for food and beverage products, including peanut…
• OI (O-I GLASS, INC.)
• FY2025 10-K: Europe are typically greater in the second and third quarters of the year, while shipments in South America are typically greater in the third and fourth quarters of the year. Unseasonably 13 Table of Contents cool weather during peak demand periods can reduce demand for certain beverages packaged in the Company's…
• FY2025 10-K: …for approximately 10% of consolidated net sales for the year ended December 31, 2025. The Company sells most of its glass container products directly to customers under annual or multi-year supply agreements. Multi-year contracts typically provide for price adjustments based on cost changes. The Company also sells…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.