Overview
Truist Securities has lowered its 12-month price objective for Graphic Packaging Holding Company (NYSE:GPK) to $14.00 from $18.00 but retained a Hold rating, citing a combination of weakening volumes and pressure on pricing. The shares are trading at $12.42, down 52.18% over the last year and sitting roughly 5% above their 52-week low of $11.83, according to InvestingPro data.
Quarterly results and analyst reaction
Graphic Packaging reported fourth-quarter 2025 adjusted earnings per share of $0.29, which missed Truist Securities’ internal forecast of $0.37 and was also below the Street consensus cited earlier of $0.34. Separately, the company’s reported EPS of $0.29 was noted as falling short of analysts' expectations of $0.36 by 19.44%, a divergence that underlines differing benchmarks used by market participants. Revenue for the quarter was $2.1 billion, beating a $2.03 billion estimate by 3.45%.
InvestingPro data indicates that six analysts have recently reduced their earnings forecasts for the coming period, reflecting a growing reassessment among sell-side models of near-term performance.
2026 guidance and cash flow outlook
For fiscal 2026, Graphic Packaging set EBITDA guidance in a range of $1.05 billion to $1.25 billion, which sits below analyst expectations of approximately $1.41 billion to $1.46 billion. The company’s EPS projection for 2026 was offered at about $0.75 to $1.15, materially lower than the Street estimate of $1.69.
Management forecast sales in a band of roughly $8.4 billion to $8.6 billion with volumes expected to be between -1% and +1%. Free cash flow for 2026 was guided to $700 million to $800 million, with management attributing much of that cash generation to targeted inventory reductions in the $230 million to $290 million range and lower cash taxes estimated at $45 million to $55 million.
Beyond 2027, the company is guiding to $700 million of free cash flow plus EBITDA growth, a step back from prior guidance that suggested roughly $1 billion in free cash flow for 2028 and 2029.
Project cost overruns and corporate review
Graphic Packaging disclosed that its new CRB mill in Waco, Texas is now expected to cost about $1.67 billion. That figure is roughly $420 million higher than a previously revised estimate of $1.25 billion and substantially above the original $1.0 billion estimate. Management said it is reviewing these cost overruns.
Valuation context and market response
Despite the operational and guidance setbacks, InvestingPro’s Fair Value analysis suggests the shares may be trading at a discount on some metrics, citing a P/E of 9.99 and a dividend yield of 3.54%. Market reaction to the EPS shortfall was negative, and analyst notes reviewed did not reveal any recent upgrades or downgrades.
Implications
The combination of a lowered price target from Truist, downward revisions from multiple analysts, guidance that trails consensus, and significant project cost increases frames a cautious near-term picture for Graphic Packaging. At the same time, valuation signals such as a sub-10 P/E and a mid-single-digit dividend yield are cited by some models as reasons the stock could be worth closer scrutiny.
What remains uncertain
Key uncertainties include whether management can deliver the guided inventory reductions and cash tax benefits that underpin the free cash flow outlook, and how the company will manage and ultimately resolve the Waco mill cost increases. Analysts' downward revisions reflect these open questions around volumes, pricing, and capital project execution.