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Graphic Packaging Holding Company GPK announced that it decided to permanently shut down its coated recycled paperboard manufacturing facility in Middletown, OH, effective June 1, 2025. This move is in sync with Graphic Packaging’s strategy to consolidate recycled paperboard production into Kalamazoo, MI, and the new Waco facility in Texas.
Graphic Packaging is working closely with 130 employees who are impacted by the closure. The company aims to provide them with employment placement assistance and support.
Shutting down Middletown aligns with Graphic Packaging’s goal to enhance its paperboard manufacturing capabilities. This will also reduce the environmental footprint through improved water and energy usage.
GPK Investing in Waco Facility to Meet Demand
In 2023, Graphic Packaging unveiled its plans to build a facility in Texas to meet the increasing consumer demand for more sustainable packaging. The Waco facility will employ advanced technology to manufacture recycled paperboard for consumer goods packaging. This will be similar to the company's Kalamazoo facility, which achieved full capacity in just a year after launching in 2022.
The Waco facility remains on track to start commercial production in late 2025.
These investments allow the company to produce the highest quality paperboard, which is North America’s most economically advantaged paperboard available.
GPK’s Q4 Performance
Graphic Packaging posted an adjusted EPS of 59 cents in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of 63 cents. The bottom line marked a 21% decline from the year-ago quarter. Sales in the fourth quarter were down 7% year over year to $2.1 billion. The top line fell short of the Zacks Consensus Estimate of $2.18 billion.
The decline in GPK’s sales was attributed to a $103-million negative impact of the divestiture of the Augusta, GA, bleached paperboard manufacturing facility, and bleached paperboard price and volume declines.
The company also witnessed a $22-million net decrease in sales from packaging operations, wherein price declines were partially offset by volume growth. Other acquisitions and divestitures (excluding Augusta) had a $14-million unfavorable impact on sales in the quarter, while foreign exchange had a $15-million unfavorable impact.
Graphic Packaging Stock’s Price Performance
The company’s shares have gained 5.8% in the past year against the industry’s 3.3% decline.
Image Source: Zacks Investment Research
GPK’s Zacks Rank & Stocks to Consider
Graphic Packaging currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies, Inc. AIT, Enersys ENS and Dover Corporation DOV. These three companies have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 5.3%. The Zacks Consensus Estimate for its 2025 earnings is pinned at $9.90 per share, which indicates year-over-year growth of 1.5%. The company’s shares have gained 15.8% in a year.
The Zacks Consensus Estimate for Enersys’ fiscal 2025 earnings is pegged at $10.00 per share, which indicates year-over-year growth of 19.7%. The company has a trailing four-quarter average earnings surprise of 2.2%. Enersys shares have gained 4.9% in a year.
The Zacks Consensus Estimate for Dover’s 2025 earnings is pegged at $9.46 per share, which indicates year-over-year growth of 14.1%. The company has a trailing four-quarter average earnings surprise of 5.3%. Dover shares have gained 2.3% in a year.