As of June 21, 2025, Graphic Packaging Holding Co's estimated intrinsic value ranges from $14.12 to $33.34 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $33.34 | +57.7% |
| Discounted Cash Flow (5Y) | $28.88 | +36.6% |
| Dividend Discount Model (Multi-Stage) | $19.98 | -5.5% |
| Dividend Discount Model (Stable) | $20.28 | -4.1% |
| Earnings Power Value | $14.12 | -33.2% |
Is Graphic Packaging Holding Co (GPK) undervalued or overvalued?
With the current market price at $21.14, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Graphic Packaging Holding Co's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.86 | 1.03 |
| Cost of equity | 7.8% | 10.6% |
| Cost of debt | 4.0% | 5.1% |
| Tax rate | 24.4% | 25.7% |
| Debt/Equity ratio | 0.81 | 0.81 |
| After-tax WACC | 5.7% | 7.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $29 | $14,296M | 74.9% |
| 10-Year Growth | $33 | $15,642M | 57.5% |
| 5-Year EBITDA | $28 | $14,060M | 74.5% |
| 10-Year EBITDA | $34 | $15,819M | 58.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $638M |
| Discount Rate (WACC) | 7.6% - 5.7% |
| Enterprise Value | $8,448M - $11,241M |
| Net Debt | $5,582M |
| Equity Value | $2,866M - $5,659M |
| Outstanding Shares | 302M |
| Fair Value | $9 - $19 |
| Selected Fair Value | $14.12 |
| Metric | Value |
|---|---|
| Market Capitalization | $6379M |
| Enterprise Value | $11961M |
| Trailing P/E | 10.29 |
| Forward P/E | 10.31 |
| Trailing EV/EBITDA | 6.75 |
| Current Dividend Yield | 190.04% |
| Dividend Growth Rate (5Y) | 4.37% |
| Debt-to-Equity Ratio | 0.81 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $10.00 |
| Discounted Cash Flow (5Y) | 25% | $7.22 |
| Dividend Discount Model (Multi-Stage) | 20% | $4.00 |
| Dividend Discount Model (Stable) | 15% | $3.04 |
| Earnings Power Value | 10% | $1.41 |
| Weighted Average | 100% | $25.67 |
Based on our comprehensive valuation analysis, Graphic Packaging Holding Co's weighted average intrinsic value is $25.67, which is approximately 21.4% above the current market price of $21.14.
Key investment considerations:
Given these factors, we believe Graphic Packaging Holding Co is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.