Wells Fargo Downgrades Greif Inc. (GEF) to Market Perform

November 20, 2012 9:20 AM EST
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Price: $54.36 --0%

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Wells Fargo downgraded Greif Inc. (NYSE: GEF) from Outperform to Market Perform and cut its valuation range from $51-$53 to $40-$42.

The firm comments, "Deterioration in the macro-environment and reduced visibility into end markets cause us to view GEF with a heightened sense of risk. We maintain that GEF has several opportunities (mostly internally focused) to drive earnings improvement over the next 6-12 months; however we believe other factors (competitive landscape and waning volume environment) will likely mute progress through at least FH1 2013."

The firm cut FQ4 2012 estimate to $0.65 from $0.75 on movements in currency, weaker-than-anticipated demand, inefficiencies related to Hurricane Sandy as well as continued margin pressure in some of the company’s Industrial Packaging businesses. The firm also cut FY2012 EPS and EBITDA estimates to $2.73 (prior $2.82) and $486MM, respectively. Our FY2013 and FY2014 ests go to $3.00 (prior $3.30) and $3.50 (prior $3.80), respectively.

GEF is scheduled to report FQ4 2012 earnings after the market close Wednesday, December 5.

For an analyst ratings summary and ratings history on Greif Inc. click here. For more ratings news on Greif Inc. click here.

Shares of Greif Inc. closed at $42.48 yesterday.

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