Greif (GEF) Achieves 52-Week High On Upbeat FY16 Outlook

Shares of Greif, Inc. (NYSE:GEF) crafted a new 52-week high of $40.91 on June 9. The new high came on the back of raised guidance for full-year fiscal 2016 and continuous focus on transformation efforts.

The stock closed a notch lower at $40.67 at the close of trading yesterday, with a solid one-year return of over 4% and year-to-date return of 32%. The average volume of shares traded over the last three months was roughly 413K.

The industrial packaging products and services provider has a market cap of $1.95 billion. Greif has beaten the Zacks Consensus Estimate three times in trailing four quarters, with an average surprise of 26.28%.

Growth Drivers

Despite posting year over year decrease in earnings per share in the second-quarter of fiscal 2016, Greif raised full-year earnings guidance to the range of $2.20 to $2.46. Earnings excludes gains and losses on the sale of businesses, timberland and property, plant and equipment, acquisition costs and restructuring and impairment charges.

Greif expects fiscal 2016 results to gain consistently from further implementation of its transformation efforts. It will better align resources with the needs of customers, improve returns on invested capital and better reward its shareholders.

The company divested non-core assets and closed facilities which will drive its performance going forward. Greif’s plans to expand gross margins are also gaining traction.

Further, Greif has executed basic fundamental process improvements in all commercial sourcing supply chain and operations. The company is also progressing on its growth initiatives and has completed two important expansions. These actions will be accretive to earnings.

Greif currently has a Zacks Rank #2 (Buy).

Stocks to Consider

Some better-ranked stocks in the same sector include Crown Holdings Inc. (NYSE:CCK) , Sonoco Products Co. (NYSE:SON) and Berry Plastics Group, Inc. (NYSE:BERY) . All these stocks carry a Zacks Rank #2 (Buy).