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Greif Approves Share Repurchase, Divulges 2020 Growth Plans

On Investor Day 2017, Greif, Inc. GEF disclosed the company’s 2020 growth plans. The industrial packaging solutions provider will focus on disciplined operational execution of strategies to fuel long-term growth.

The company anticipates that operating profit before special items will be in the range of $425–$465 million in 2020. It also guides free cash flow range of $230–$270 million in 2020. In addition, Greif introduced its “Path to Growth” plan, which highlights the process, strategy and acquisition priorities.

Greif also announced the authorization of repurchase of up to four million shares of Class A Common Stock or Class B Common Stock or any combination of the foregoing. Thus, the company will benefit from the further execution of transformation efforts.

Previously, Greif had implemented a strategy to enhance its business portfolio, address under-performing assets and generate additional cash. This strategy includes selling, general and administrative reductions across the company, as well as rationalization of manufacturing facilities.

Greif has been successful in fixing under-performing businesses and divesting non-core assets and closed facilities, which will drive long-term performance. During fiscal 2016, the company completed four divestitures. These divestitures were of non-strategic businesses, three in the Rigid Industrial Packaging & Services segment, and the other in the Flexible Products & Services segment.

Greif outperformed the Zacks classified Containers-Metal/Glass sub-industry with respect to price performance over the past one year. The stock gained around 47.3%, while the industry recorded growth of 17% over the same time frame.

Greif currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same space include AGCO Corporation AGCO, Apogee Enterprises, Inc. APOG and Deere & Company DE. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has an average positive earnings surprise of 40.39% for the trailing four quarters.

Apogee generated an average positive earnings surprise of 3.42% over the past four quarters.

Deere has a remarkable average positive earnings surprise of 70.41% for the last four quarters.

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Greif Bros. Corporation (GEF): Free Stock Analysis Report
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