Reynolds Consumer Products Inc. (REYN) PT Lowered to $31, Stifel Sees Shares in the Penalty Box

Stifel analyst Mark Astrachan lowered the price target on Reynolds Consumer Products Inc. (NASDAQ: REYN) to $31.00 (from $35.00) after the company reported the flow-through of heightened input costs.

The analyst reiterated a Buy rating, stating "We now anticipate adjusted EBITDA to return to 2019 levels by 2023 as low-double-digit price increases implemented through late 2021 help mitigate high-teens input cost pressure. We think Reynolds is likely to retain enough pricing, along with solid growth in end-demand, that gross profit and EBITDA dollars should increase in the mid-single-digits through 2023. From a stock perspective, we anticipate REYN shares decline somewhat less than the mid-teens 2021 guidance reduction given some inflation was anticipated. That said, we also think shares are likely to remain rangebound at aftermarket levels near-term reflecting reduced investor visibility and confidence that 2H21 guidance is achievable and that Reynolds can resume mid-single-digit EBITDA growth beginning in 2022."

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