Jefferies Adjusts Estimates On GPK In Light Of Acquisition

Jefferies is adjusting its estimates, but maintaining both its Buy rating and its $6.50 price target on Graphic Packaging Holding Co. GPK following the company's recent acquisition. According to Jefferies, “We are raising our estimates for 2011 and 2012 now that the Sierra Pacific transaction has closed, and we continue to believe GPK is the best way to capitalize on the pricing momentum in paperboard….We are raising our 2011 and 2012 EPS by $0.01 now that the Sierra Pacific transaction has closed. The company expects to realize $2 - 4 mil in synergies and the impact from the inventory step up should be modest. The transaction gives GPK the much needed converting capacity in the West Coast, while tapping into the fast growing craft beer and box wine markets.” GPK closed at $5.14 yesterday.