Graphic Packaging: Recent Capex Investments Suggest Substantial Free Cash Flow Growth Ahead

Summary

  • Graphic Packaging is a manufacturer of fiber-based packaging products for various industries.
  • Recent results showed a decline in revenue but an improvement in profitability, and management provided positive guidance for 2024.
  • With over a billion dollars invested into capex in 2023, the company has been making significant investments that position it well for the future.
  • At a fraction of the valuation of its peers, despite attractive organic growth and modest leverage, the company remains a compelling investment idea in the packaging space.

Brown paper coffee cup.

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Introduction

Graphic Packaging Holding Company (NYSE:GPK) is a manufacturer of fiber-based packaging and sells its products to a varied group of end markets. On February 20th, the company announced its Q4 and full year

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I'm an insurance Case Manager with a deep interest in investing. My investment philosophy is all about buying high quality stocks and great businesses. My favorite businesses are those led by disciplined capital allocators, earn exceptional returns on capital, and can compound their invested capital over long periods of time.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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