Keys to Watch

Here’s the latest Wall Street analyst move on Greif stock leading up to today’s earnings results:

• Earlier this month, Wells Fargo lowered its price target from $75 to $67, maintaining an Overweight rating, reflecting cautious optimism amid tariff concerns and industrial demand challenges.

Greif announced its fiscal second quarter 2025 results, revealing a mixed financial picture with strong adjusted profitability and a maintained dividend, leading to an initial 1.6% increase in its stock price in after-hours trading that was quickly erased.

Greif reported net income of $47.3 million, or $0.82 per diluted Class A share. This compares to $44.4 million or $0.77 per diluted Class A share in the prior year quarter, representing a 6.5% increase. Excluding adjustments, net income was $68.7 million, or $1.19 per diluted Class A share, a significant 42.8% increase from $0.83 in the prior year period.

Net sales for each segment:

Customized Polymer Solutions: $329.3 million
Durable Metal Solutions: $378.9 million
Sustainable Fiber Solutions: $599.1 million
Integrated Solutions: $78.4 million

(Summing these yields $1,385.7 million. The preview’s total revenue estimate was $1.428 billion, which implies a miss based on the sum of segment sales, although the press release structure makes a direct comparison to a single “total sales” challenging without the consolidated statement table.)

Adjusted EBITDA was a strong point, increasing 26.0% to $213.9 million compared to $169.7 million in the prior year. This indicates significant improvements in operational efficiency. The company also reported robust cash generation, with net cash provided by operating activities increasing to $136.4 million and adjusted free cash flow rising to $109.6 million.

Regarding the dividend, Greif’s Board of Directors declared quarterly cash dividends of $0.54 per share of Class A Common Stock and $0.81 per share of Class B Common Stock.

For its outlook, Greif provided updated fiscal year low-end guidance:

Adjusted EBITDA: $725 million
Adjusted free cash flow: $280 million

The company’s commentary states, “Our markets have now experienced a multi-year period of industrial contraction, and we have not identified any compelling demand inflection on the horizon, despite slightly improved year-over-year volumes.” They added, “We are raising our fiscal year low-end guidance based upon our second quarter performance and improved price/cost outlook relative to our previous guidance.”

Greif faces cyclical and structural risks, and both are in play this quarter.

On the cyclical side, the company’s performance is closely tied to global manufacturing demand — particularly in chemicals, construction, and agricultural supply chains. If macro softness continues into the second half of FY25, Greif may struggle to lift volumes even if pricing holds. That would delay any operating leverage recovery and increase reliance on SG&A cost controls to defend margins.

Structurally, GEF’s strategy is reliant on disciplined pricing and customer retention across commoditized product categories. If volume remains weak and competitors begin discounting to win share, Greif could be forced into margin-compromising concessions. Additionally, while current debt levels are manageable, a large acquisition or supply chain shock could tighten credit flexibility.

Dividend sustainability remains a watchpoint, though currently well-covered by FCF. If operating results disappoint for a fourth consecutive quarter, and if FCF declines in tandem, the risk premium on the dividend could rise — pressuring the equity despite otherwise strong fundamentals.

• Q2 EPS Estimate (GAAP): $1.04
• Revenue Estimate: $1.428 billion
• EBITDA Estimate: $192 million
• YoY Revenue Growth: +4.2%
• Dividend Yield: 3.3%
• EBITDA Margin: ~13.5%
  

Street expectations reflect modest top-line improvement but continued pressure on operating leverage. The $1.428B revenue estimate implies slight YoY growth, helped by more stable resin pricing and less pricing erosion in the Global Industrial Packaging segment. EBITDA is pegged at $192M — down from peak 2023 levels but likely sufficient to maintain dividend coverage and conservative leverage.

EPS of $1.04 would mark sequential improvement over Q1 ($0.90), but still well below the $1.34 posted in the year-ago quarter. Analysts have trimmed estimates steadily over the past six months, so sentiment is tepid — but the bar is low. A modest beat combined with solid cash conversion could shift the narrative from defensive to selectively constructive.