Is Graphic Packaging a Bargain After Its 42% Share Price Slide in 2025?

• If you have been wondering whether Graphic Packaging Holding is a bargain or a value trap right now, you are not alone. This is exactly the question we are going to unpack together.
• Despite a modest 5 year gain of just 1.4%, the stock has dropped 41.8% year to date and 46.2% over the last 12 months, with shorter term moves of 2.6% over the past week and 3.0% over the last month adding to the volatility.
• These swings have played out against a backdrop of ongoing debate about demand for consumer packaging, shifts in input costs and investors rotating between defensive and cyclical names. Recent commentary around sustainable packaging trends and how producers like Graphic Packaging can capture that demand has also kept sentiment moving.
• Even after all that, Graphic Packaging scores a full 6 out of 6 on our valuation checks. We will break this down using several valuation approaches, and later we will look at a way to tie those numbers into the company’s longer term story.

Find out why Graphic Packaging Holding's -46.2% return over the last year is lagging behind its peers.

Approach 1: Graphic Packaging Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and then discounting them back to today in $ terms. For Graphic Packaging Holding, the 2 Stage Free Cash Flow to Equity model starts from last twelve month free cash flow of roughly $117 million in the red, then leans on analyst forecasts that see cash flow recovering into the hundreds of millions over the next decade.

Those analyst estimates only explicitly cover the next few years. Simply Wall St extrapolates beyond that, with projected free cash flow rising to about $786 million by 2035. When all those future cash flows are discounted back to today, the model arrives at an intrinsic value of about $37.58 per share.

Compared with the current share price, this implies the stock is around 58.5% undervalued. This suggests a wide margin of safety if the cash flow recovery plays out as expected.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Graphic Packaging Holding is undervalued by 58.5%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Graphic Packaging Holding.

Approach 2: Graphic Packaging Holding Price vs Earnings

For profitable companies like Graphic Packaging, the price to earnings (PE) ratio is a useful way to gauge how much investors are willing to pay for each dollar of current earnings. In general, firms with stronger, more reliable growth prospects and lower perceived risk can justify a higher PE, while slower growing or riskier businesses usually deserve a lower multiple.

Graphic Packaging currently trades on a PE of about 9.0x. That is well below both the Packaging industry average of roughly 15.5x and the broader peer group average near 19.8x, implying the market is assigning a noticeable discount to the stock. Simply Wall St also estimates a proprietary Fair Ratio of 17.6x, which reflects what the PE might be based on factors such as the company’s earnings growth outlook, profit margins, industry positioning, market cap and key risks.

This Fair Ratio can be more informative than a simple comparison to industry or peers, because it adjusts for Graphic Packaging’s specific fundamentals rather than assuming all companies should trade at the same level. With the shares at 9.0x compared to a Fair Ratio of 17.6x, the multiple analysis points to Graphic Packaging being materially undervalued.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Graphic Packaging Holding Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simple stories that investors create on Simply Wall St’s Community page to explain their view of a company by linking its business drivers to a specific financial forecast, and then to a Fair Value they can compare with the current share price to decide whether to buy, hold or sell. The platform automatically updates those Narratives when new information like earnings or news arrives. For Graphic Packaging Holding, one investor might build a bullish Narrative around accelerating demand for sustainable fiber packaging, rising margins and a Fair Value well above today’s price. Another investor could be more cautious, assuming slower revenue growth, tighter margins and a Fair Value closer to or even below the current market price.

Do you think there's more to the story for Graphic Packaging Holding? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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