Greif Inc. Stock Downgraded (GEF)

NEW YORK ( TheStreet) -- Greif (NYSE: GEF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally poor debt management.

Highlights from the ratings report include:
  • GEF's revenue growth trails the industry average of 23.6%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Containers & Packaging industry and the overall market, GREIF INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for GREIF INC is rather low; currently it is at 22.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.40% trails that of the industry average.

Greif, Inc. manufactures and sells industrial packaging products, bulk containers, and containerboard and corrugated products worldwide. The company has a P/E ratio of 16.8, above the average consumer non-durables industry P/E ratio of 11.1 and below the S&P 500 P/E ratio of 17.7. Greif has a market cap of $1.04 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are down 9.1% year to date as of the close of trading on Tuesday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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