Graphic Packaging falls as Wells Fargo fears headwinds

Graphic Packaging Holding

19/10/2023 15:03

** Shares of food and beverage packaging company Graphic
Packaging Holding Co  GPK.N  fall ~2% to $21.00
    ** Wells Fargo cuts price target to $19 from $26, downgrades
rating to "underweight" from "overweight"
    ** Cites weakening of U.S. boxboard packaging fundamentals
as a result of sustained inflation in food and beverage sector,
adoption of obesity drug GLP-1 (Glucagon-like peptide-1) and
pressures from foreign producers
    ** "At the core of GLP-1 treatment for obesity care,
patients will ultimately consume roughly one-third less of
normal caloric intake, amplifying already lower packaged food
demand" - Wells Fargo
    ** "As more CPGs (consumer packaged goods) look to offset
inflationary headwinds with pricing actions, we believe a chain
effect of lower CPG demand will translate into reduced packaging
volumes" - Wells Fargo
     ** The new price target represents a ~11% downside to the
stock's last close $21.40
    ** Seven of ten brokerages rate the stock "buy" or higher,
two "hold" and one "sell"; their median PT is $29.50
    ** Up to Wednesday's close, co's stock had fallen ~4%, YTD

 (Reporting by Aatreyee Dasgupta)
 ((Aatreyee.Dasgupta@thomsonreuters.com))