NEW YORK ( TheStreet) -- Graphic Packaging (NYSE: GPK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, solid stock price performance, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 197.9% when compared to the same quarter one year prior, rising from -$32.80 million to $32.10 million.
  • GPK's revenue growth trails the industry average of 19.1%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • GRAPHIC PACKAGING HOLDING CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRAPHIC PACKAGING HOLDING CO reported lower earnings of $0.03 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.03).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Containers & Packaging industry and the overall market, GRAPHIC PACKAGING HOLDING CO's return on equity is below that of both the industry average and the S&P 500.

Graphic Packaging Holding Company, together with its subsidiaries, provides packaging solutions in the United States, Canada, Central/South America, Europe, and the Asia-Pacific. The company operates in two segments, Paperboard Packaging and Flexible Packaging. The company has a P/E ratio of 14.7, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Graphic Packaging has a market cap of $1.5 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 7.2% year to date as of the close of trading on Tuesday.

You can view the full Graphic Packaging Ratings Report or get investment ideas from our investment research center.
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