Graphic Packaging Stock Surges Over 10% as Investors Snap Up Shares Following Earnings Dip
Graphic Packaging Holding Company (NYSE: GPK) staged a significant rebound on Wednesday, with shares climbing 10.3% to close at $13.70. The surge comes a day after the packaging giant's stock tumbled close to its 52-week low, presenting what some market participants viewed as a bargain entry point following the sell-off.
The rally followed the company's release of fourth-quarter and full-year 2024 results, which revealed a challenging period. For the full year, net income fell 32% to $444 million, down from $658 million in the prior year. Net sales declined 2.3% to $8.6 billion. The fourth quarter proved even more difficult, with net income plunging 48% to $71 million, while sales remained flat at $2.1 billion.
Management attributed the profit pressures to net charges from non-recurring items and amortization. On the sales side, the full-year results were impacted by a $150 million headwind from the disposal of its Augusta, Georgia bleached paperboard facility, coupled with lower paperboard prices, declining volumes, and a $97 million drop in packaging sales.
"Consumer affordability created a challenging market for our customers, and competitive pressure remains a near-term headwind," said Graphic Packaging's President and CEO, Robbert Rietbroek. "As we move into 2026, our priorities are clear: drive operational excellence; deliver exceptional customer service; improve our cost structure; and drive substantial free cash flow to strengthen the balance sheet and return capital to shareholders."
Rietbroek also announced a comprehensive strategic review of the company's organization, operations, and portfolio to focus resources on areas with the greatest potential for shareholder value.
The sharp one-day recovery highlights the volatile sentiment surrounding value stocks in a mixed economic environment. While the earnings report underscored real challenges in the packaging sector, the subsequent bounce indicates a segment of the market believes the negative news may have been overdone, pricing in excessive pessimism.
Market Voices
David Chen, Portfolio Manager at Horizon Capital: "This is a classic case of 'bad news is already in the price.' GPK is a leader in sustainable packaging with a solid client base. The sell-off was an overreaction to transient cost issues. The strategic review could unlock significant efficiency gains."
Sarah Miller, Retail Investor: "I've held GPK for years for its dividend and steady business. The drop was worrying, but yesterday's bounce gives me hope it was a blip. The CEO's focus on cash flow and the balance sheet is exactly what I want to hear right now."
Marcus Thorne, Editor at 'The Skeptical Investor' Newsletter: "A dead-cat bounce. Let's not sugarcoat it. The fundamentals are deteriorating—sales down, income halved in Q4. This company is getting squeezed by competition and weak demand. Buying this dip is trying to catch a falling knife. Management's 'review' sounds like a precursor to restructuring charges and more pain."
Anita Lopez, Industry Analyst at PackTrends: "The packaging sector is in a cyclical downturn, and GPK is feeling it. However, their scale and investment in recycled fiberboard are long-term strengths. Wednesday's action suggests institutional investors are starting to position for the next cycle, betting current prices discount the near-term woes."