Breaking Down Greif, Inc. (GEF) Financial Health: Key Insights for Investors

If you are looking at Greif, Inc. (GEF) right now, you are defintely seeing a mixed signal, and that's the tension we need to break down. The headline from their fiscal 2025 third quarter earnings, reported in November, showed a 2.6% decline in total revenue to $1.13 billion and a sharp 25.9% drop in net income to $69.40 million, reflecting real pressures in industrial packaging demand. But here's the quick math: despite those headwinds, the stock showed a 5.93% gain month-to-date in November, suggesting investors are looking past the immediate dip and focusing on the strategic cleanup.

Honestly, the real story is in the balance sheet and forward-looking moves, like the successful debt reduction that saw their net debt fall by $283.5 million to a much healthier $2.431.8 billion, bringing the leverage ratio down to 3.1x. That's a massive de-risking move. So, while the current consensus EPS forecast for the full fiscal year 2025 sits at $2.91-a number that has been revised down-the fact that the CFO just bought 2,125 shares for $139,215 on November 21, 2025, tells you something about internal confidence. We need to explore if this strategic repositioning justifies the current $61.06 stock price and the 'Outperform' rating some analysts are giving it.

Revenue Analysis

You're looking for a clear picture of where Greif, Inc. (GEF) is making its money right now, and the recent fiscal 2025 Q3 results give us a precise, if slightly mixed, view. The direct takeaway is that while the company's total net sales for the third quarter of 2025 contracted slightly, its core industrial packaging segments remain the primary revenue drivers, with Durable Metal Solutions leading the pack.

For the third quarter of fiscal 2025, Greif, Inc. reported total revenue of approximately $1.13 billion, which was a 2.6% decline year-over-year (YoY). This contraction reflects broader industrial market challenges, but management is still projecting a mid-single-digit revenue growth-specifically 4% to 6%-for the full fiscal year 2025, betting on strategic initiatives and a stronger Q4. That's the key tension: current softness versus future optimism.

Here's the quick math on the segment contributions for Q3 2025, which clearly shows the composition of their revenue streams:

• Durable Metal Solutions: Generated $399.80 million.
• Customized Polymer Solutions: Contributed $339.80 million.
• Sustainable Fiber Solutions: Accounted for $308 million.
• Integrated Solutions: Added $87.10 million.

The Durable Metal Solutions segment, which includes steel drums and intermediate bulk containers (IBCs), is the largest revenue source, making up about 35.4% of the Q3 total. Sustainable Fiber Solutions, covering containerboard and uncoated recycled paperboard (URB), is a close third at roughly 27.2%. To be fair, the company's focus on its Mission Statement, Vision, & Core Values of Greif, Inc. (GEF) has been to prioritize value over volume, which can sometimes lead to lower top-line numbers in a soft market.

The most significant change to the revenue structure is the strategic portfolio transformation through major divestitures. Greif, Inc. completed the sale of its timberlands business and its containerboard business in late 2025. The containerboard business, for example, had contributed significant sales and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in the past, so its removal will lower the total revenue base but is expected to lower debt and improve the overall margin profile by focusing on core industrial packaging.

This is a major shift, as it focuses the company more heavily on its packaging segments and away from the cyclical, capital-intensive fiber and timber assets. You should defintely monitor how the remaining segments perform in 2026 without the divested revenue streams to truly gauge the new operating model's success.

Profitability Metrics

You need to know how efficiently Greif, Inc. (GEF) is turning sales into profit, especially after the major divestitures in fiscal year 2025. The headline numbers look rough, but the adjusted figures tell a story of operational discipline countering soft market demand. The core takeaway is that while reported Net Income plummeted due to one-off items, the operational profitability, as measured by Adjusted EBITDA, remained resilient.

For the 11-month fiscal year ended September 30, 2025, Greif, Inc. reported Net Income from continuing operations of only $15.1 million, a sharp 93.2% decrease from the prior year. This dramatic drop was largely driven by significant adjustments, including tax expense related to valuation allowances and higher corporate allocated Selling, General & Administrative (SG&A) expenses following the Containerboard Business divestment. That's why you should focus on the adjusted figures for a clearer view of the underlying business performance.

Here's the quick math on the key profitability ratios for the 11-month continuing operations, based on approximately $3.93 billion in sales for the period:

• Net Profit Margin (GAAP): Approximately 0.38% ($15.1M / $3,930M).
• Adjusted Net Profit Margin: Approximately 2.94% ($115.7M / $3,930M).

The Adjusted Net Income of $115.7 million, which excludes the impact of adjustments, fell 43.8% year-over-year, reflecting the persistent volume softness in core segments like industrial packaging. To be fair, the company is actively managing this by accelerating cost optimization.

Operational Efficiency and Cost Management

Operational efficiency is where Greif, Inc. is showing its strength, even as sales volumes lag. The company achieved cost optimization run-rate savings of approximately $50.0 million by the end of fiscal year 2025, which is a defintely positive sign of management's focus. This progress led them to increase their anticipated total cost optimization commitment to $120.0 million from the initial $100.0 million target.

The Gross Profit Margin for the quarter ended July 31, 2025, was 22.68%, demonstrating the company's ability to manage its Cost of Goods Sold (COGS) through lower raw material and manufacturing costs, a crucial factor in a cyclical industry [cite: 12 (from step 1)]. This margin strength is a direct result of cost discipline offsetting lower volumes and pricing pressure.

Profitability Ratios vs. Industry Averages

When you compare Greif, Inc.'s profitability to the broader Packaging & Container industry, the gap in Net Margin is significant, but the operational metrics show a more competitive picture. The GAAP Net Profit Margin of 0.38% is far below the industry average, but this is distorted by non-recurring items. The Adjusted Net Margin of 2.94% is a better proxy, but still trails the industry average [cite: 16 (from step 1)].

What this comparison hides is the impact of the divestiture strategy, which is intended to narrow the portfolio and intensify focus on higher-margin markets. The goal is to close this margin gap in the near-term. For a deeper look at the market's view on these strategic moves, you should read Exploring Greif, Inc. (GEF) Investor Profile: Who's Buying and Why?

Your action item is to track the realization of the announced $120.0 million cost savings in the 2026 fiscal year; that will be the true test of their operational leverage.

Debt vs. Equity Structure

You want to know how Greif, Inc. (GEF) is financing its operations, and the short answer is that they have dramatically shifted to an equity-heavy model in fiscal year 2025. This move significantly de-risks the balance sheet, which is a major positive for investors.

The key takeaway is that Greif, Inc. has slashed its total debt by over a billion dollars, moving its financial leverage from a point of concern to one of the lowest in the industrial packaging sector. That's a powerful change.

Here's the quick math on Greif, Inc.'s debt structure as of the end of the 2025 fiscal year (September 30, 2025):

• Total Debt fell to approximately $1,202.5 million [cite: 4 in previous step, 1 in first step].
• This represents a massive reduction of roughly $1,538.1 million from the prior year [cite: 4 in previous step, 1 in first step].
• Net debt (total debt minus cash) is now down to $945.8 million [cite: 4 in previous step, 1 in first step].

This debt reduction was the direct result of their strategic divestitures (selling assets to focus on core business), specifically the all-cash sale of the Containerboard Business for $1.8 billion and the sale of timberlands for approximately $462.0 million [cite: 4 in previous step, 1 in first step]. They used that cash to pay down debt, plain and simple.

Leverage and Industry Comparison

The most telling metric here is the debt-to-equity (D/E) ratio. This ratio measures how much debt a company is using to finance its assets relative to the value of shareholders' equity (the capital invested by shareholders). It's a key indicator of financial leverage (how much a company relies on debt).

Greif, Inc.'s debt-to-equity ratio has dropped to approximately 0.47 [cite: 5 in first step]. To be fair, this is a massive improvement. The company's Credit Agreement leverage ratio (Adjusted Net Debt to Credit Agreement EBITDA) dropped from 3.48x to a much healthier 1.63x [cite: 4 in previous step, 1 in first step].

Compare this to the industry average for the Packaging & Containers sector, which sits around 1.46 [cite: 1 in second step].

What this tells us is that Greif, Inc. is now significantly less leveraged than the industry average. A lower ratio means lower risk for you, the investor, because the company relies less on borrowing to fund its operations. It's a defintely a strong sign of financial stability.

Financing Strategy: Debt vs. Equity

Greif, Inc. balances its funding between debt and equity by using divestitures to deleverage and then selectively using debt for growth. For example, in July 2025, they had a long-term debt issuance of $473.4 million [cite: 10 in second step]. This shows a strategy of cleaning up the balance sheet with asset sales, then using a controlled amount of debt to finance growth initiatives within their core industrial packaging segments.

The company's strategic focus, outlined in their Build to Last strategy, is now clearly on portfolio optimization and capital efficiency, which means prioritizing equity funding and internal cash flow over heavy borrowing. This shift is a key part of their long-term vision. You can read more about their strategic direction here: Mission Statement, Vision, & Core Values of Greif, Inc. (GEF).

The most recent credit rating information is implied by the successful debt reduction and the improved leverage ratio, which should translate to better terms for future debt. The strategic actions taken in 2025 have fundamentally changed the company's capital structure, making it much more resilient to economic downturns.

Next Step: Review Greif, Inc.'s Q4 2025 cash flow statement to confirm the sustainability of their adjusted free cash flow of $338.8 million [cite: 1 in first step] now that the debt load is lower.

Liquidity and Solvency

You need to know if Greif, Inc. (GEF) can cover its short-term bills, especially with the industrial packaging sector facing demand shifts. The quick answer is yes, the company's liquidity position is defintely adequate, largely due to significant asset sales aimed at debt reduction, which dramatically reshaped the balance sheet in fiscal year 2025.

Current and Quick Ratios (Liquidity Positions)

Greif's liquidity ratios as of the third quarter of fiscal year 2025 (July 31, 2025) show a solid ability to meet near-term obligations. The Current Ratio, which measures current assets against current liabilities, stood at approximately 1.41. This means Greif has $1.41 in current assets for every dollar of current liabilities, which is a comfortable margin.

The Quick Ratio (Acid-Test Ratio), which is a stricter measure that excludes inventory and other less liquid current assets, was reported at approximately 1.18. A ratio above 1.0 is generally strong, indicating that the company can pay off its current liabilities using only its most liquid assets (like cash and accounts receivable). This is a good sign, particularly in a manufacturing business where inventory can be slow to convert into cash.

• Current Ratio: 1.41 (As of Q3 2025).
• Quick Ratio: 1.18 (As of Q3 2025).

Analysis of Working Capital Trends

The company has maintained a healthy and growing working capital (Current Assets minus Current Liabilities) throughout the year. As of July 31, 2025, Greif's working capital was approximately $583.7 million ($1,995.4 million in Current Assets minus $1,411.7 million in Current Liabilities). This positive trend is critical for a cyclical business like industrial packaging, as it provides a cash cushion to manage fluctuations in raw material costs and customer demand.

Here's the quick math on the major components: Current Assets saw a sharp increase, driven primarily by $465.2 million in Current Assets Held for Sale, which reflects the company's strategic divestitures. Meanwhile, Current Liabilities rose due to a significant increase in short-term borrowings to $401.9 million, up from $18.6 million at the end of fiscal year 2024. The divestiture proceeds are earmarked for debt reduction, which will likely re-balance these figures in the near future.

Cash Flow Statements Overview

The cash flow statement for the full fiscal year 2025 is dominated by the strategic repositioning. While Operating Cash Flow (OCF) for the full year was a modest $58.6 million, the quarterly trend is more telling, showing a significant recovery from a Q1 2025 use of cash (-$30.8 million) to a strong Q3 2025 source of $199.9 million. This indicates that core business operations are improving their cash generation as the year progresses.

The Investing Cash Flow was a massive positive inflow of approximately $1.68 billion for the year, almost entirely driven by the sale of the Containerboard Business and the Timberlands business. This cash was immediately put to work, resulting in a large negative Financing Cash Flow of approximately -$1.73 billion, which was used to pay down debt and fund dividend payments.

This is a major capital restructuring story, not just a standard operating year.

Potential Liquidity Concerns or Strengths

The primary strength is the intentional deleveraging (debt reduction) strategy, which has turned illiquid assets (timberland, containerboard) into a substantial cash influx. The cash from investing activities is being used to drastically reduce long-term debt, which improves future solvency and reduces interest expense. The main near-term concern is the volatility in the core business's Operating Cash Flow, which started the year weak, but the strong recovery in Q2 and Q3 is a major plus. The positive working capital and strong Quick Ratio mean there's no immediate liquidity crisis.

For a deeper dive into the company's valuation, check out the full post: Breaking Down Greif, Inc. (GEF) Financial Health: Key Insights for Investors.

Valuation Analysis

You are looking at Greif, Inc. (GEF) and wondering if the market has it right-is it truly valued fairly, or is there a hidden opportunity or risk? The direct takeaway is that Greif, Inc. appears to be fairly valued right now, leaning slightly toward the lower end of its historical valuation range, which suggests a decent margin of safety for a long-term investor. The consensus from Wall Street is a firm Hold.

The current stock price sits around $61.06 as of mid-November 2025. This price is well below the 52-week high of $73.16 but comfortably above the 52-week low of $48.23. This price movement reflects the industrial sector's contraction and the strategic divestments Greif, Inc. has navigated through 2025, which have caused some earnings volatility.

Key Valuation Multiples (FY 2025)

To be fair, a quick look at the core valuation multiples for the 2025 fiscal year shows a mixed but generally reasonable picture compared to the broader market. We use these ratios to gauge if the stock is cheap or expensive relative to its earnings, book value, and cash flow before debt payments (EBITDA).

Here's the quick math: The trailing P/E of 20.00 is based on a trailing 12-month (TTM) Earnings Per Share (EPS) of $3.15. The forward P/E of 15.33 is much more compelling, but it hinges on analysts' estimated EPS of $4.11 for the coming year. The Price-to-Book (P/B) ratio of 0.96 is defintely a point of interest, as it means you are buying the company for slightly less than the value of its net assets.

Dividend and Analyst Sentiment

Greif, Inc. continues to be a reliable income stock. The forward annual dividend payout is set at $2.24 per share. This translates to a solid dividend yield of approximately 3.67%. The dividend payout ratio, based on TTM earnings, is a manageable 71.11%, which is a healthy, sustainable level below the 75% threshold. This means the company's earnings are more than enough to cover the dividend payments, even during a period of industrial contraction.

Wall Street's professional view is generally cautious but not bearish. The current consensus rating is Hold, with one analyst rating a Buy and five a Hold. The average consensus price target is $69.50. This suggests an expected upside of about 13.8% from the current $61.06 price, but analysts are waiting for clearer signs of industrial recovery before upgrading their ratings. If you want to dig deeper into who is buying and selling, check out Exploring Greif, Inc. (GEF) Investor Profile: Who's Buying and Why?

• Action: Monitor the forward EPS estimates, especially for Q1 2026, to confirm the expected earnings recovery.
• Limit: The low P/B ratio is attractive, but what this estimate hides is the potential for further industrial demand softness, which could impact the expected 2026 EPS growth of 27.01%.

Risk Factors

You need to look past the headline numbers of Greif, Inc. (GEF)'s recent portfolio moves. While the company is defintely becoming more focused, its core risks haven't vanished; they've just changed shape. The direct takeaway is this: Greif's biggest near-term risk is the persistent softness in industrial demand, but the massive debt reduction from divestitures provides a strong financial buffer.

The external risks are clear. Greif operates in a cyclical business, and the industrial contraction that began earlier is anticipated to continue into the 2025 fiscal year. This is not a surprise, but it means volume softness is the primary headwind. For instance, the Sustainable Fiber Solutions segment saw sales volumes drop by 7.7% in the recent quarter, reflecting that soft demand for fiber and economic downtime at an uncoated recycled board mill. This is a real-world impact of a slow economy.

Also, don't ignore the global macro picture. As an international player, Greif faces significant external risks from geopolitical uncertainties-like the conflict in Ukraine-and currency exchange fluctuations. Plus, the packaging industry is fiercely competitive, and customer consolidation continues to put pressure on pricing, which makes it harder to simply pass on costs.

The strategic shift itself introduces a new kind of risk. By selling off the Containerboard Business for $1.8 billion and the timberlands for $462 million, Greif is narrowing its focus to higher-margin areas like polymers. But this action increases the company's exposure to the cyclical swings and regulatory risks specific to the core packaging sector. It's a trade-off: higher potential margin for higher concentration risk.

Here's the quick math on the financial health and mitigation efforts. Management is not sitting still; they're tackling what they can control. The sale proceeds, totaling $2.3 billion, were used to pay down debt, which is a huge win. They closed fiscal 2025 with a leverage ratio of under 1x, a massive improvement from the 3.6x seen in the prior year. That low leverage is your safety net against the demand slump.

Greif's internal operational response is centered on cost-cutting and efficiency through the Greif Business System 2.0. They are accelerating this plan. In fiscal 2025 alone, the company achieved $50 million in run-rate savings, which is more than double their initial annual target. This is a clear, actionable mitigation strategy for margin protection:

• Achieve $50 million in FY 2025 run-rate savings.
• Target $80 million to $90 million cumulative run-rate savings by FY 2026.
• Reduce professional roles by roughly 8% in the recent quarter.

The company's full-year 2025 reported net sales of $3.93 billion and net income of $840 million (for the 11-month fiscal year) show a business in transition, but the balance sheet is now significantly stronger. The focus is on executing the new segment structure-Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Integrated Solutions-to drive organic growth in less cyclical areas. If you want to dig deeper into who is betting on this transformation, you should check out Exploring Greif, Inc. (GEF) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path forward for Greif, Inc. (GEF) beyond the recent portfolio shake-up, and the picture is one of deliberate, margin-focused growth. The company has made a decisive pivot, shedding lower-margin assets to concentrate on high-value industrial packaging, especially in polymers. This strategic shift is the core driver for their next phase of profit expansion.

Refocusing the Portfolio for Higher Margins

Greif is executing its Build to Last Strategy by aggressively reshaping its business mix. The major action in fiscal year 2025 was the all-cash sale of the Containerboard Business for $1.8 billion, which closed in August 2025, plus the sale of timberlands for approximately $462.0 million. This isn't just selling assets; it's a capital reallocation move that sharply reduces debt-total debt fell by over $1.5 billion to $1.203 billion in fiscal 2025-and focuses the company on high-growth, high-margin areas like specialized polymer packaging. It's a classic move: sell the commodity, keep the specialty.

The acquisition of Ipackchem in March 2024, a global leader in high-performance plastic packaging, is a concrete example of this focus. This bolsters their offerings in premium barrier and non-barrier jerrycans, giving them a stronger foothold in markets that demand high-specification containers, which typically command better pricing power. Plus, the Board is considering a $150 million share repurchase program, which signals confidence in the post-divestiture cash flow.

Future Revenue and Earnings Trajectory

The near-term numbers reflect the portfolio transformation, but the forward-looking estimates show the expected benefit. For the eleven-month fiscal year 2025 (ending September 30, 2025), Greif reported Adjusted EBITDA of $511.3 million and Adjusted free cash flow of $338.8 million. The consensus EPS forecast for the full fiscal year 2025 is around $2.91 per share. Here's the quick math on what analysts see for the immediate future:

What this estimate hides is the significant cost optimization program underway, targeting $15.0 million to $25.0 million in run-rate savings by the end of fiscal year 2025, which will definitely pump up margins in 2026. Looking further out, Greif has reaffirmed its 2027 financial targets of $1 billion Adjusted EBITDA and $500 million free cash flow, driven by volume recovery and cost savings. That's a clear benchmark for success.

Competitive Edge and Strategic Initiatives

Greif's competitive advantages are not just in its global scale but also in its operational discipline and focus on sustainability-a growing factor for industrial customers. Their commitment to the circular economy is evidenced by a 37% year-over-year increase in the use of post-consumer resin (PCR) in their products. That's a measurable edge in a world increasingly focused on environmental, social, and governance (ESG) factors.

• Customer Service: A high Net Promoter Score (NPS) of 70 in 2024 reflects strong customer loyalty.
• Operational Excellence: Use of Lean Six Sigma and the Greif Business System 2.0 (GBS 2.0) drives efficiency and cost competitiveness.
• Sustainability Leadership: Focus on circular solutions aligns with customer and regulatory trends, supporting premium pricing.

The company's eight 'Must Win Battles' for 2025, including things like delivering high margin growth and simplifying how they do business, are the internal roadmap for achieving those 2027 targets. You can see more on their long-term direction here: Mission Statement, Vision, & Core Values of Greif, Inc. (GEF).