Barclays Raises Reynolds Consumer Products Price Target to $22, Maintains Equal Weight Rating

Barclays raised Reynolds Consumer Products' price target to $22 from $21 and maintained an Equal Weight rating. Despite significant aluminum inflation since April, the company's guidance for the year remains intact.

Barclays has increased its price target for Reynolds Consumer Products (REYN) to $22, up from the previous $21, while maintaining an Equal Weight rating on the stock. This adjustment comes as the company continues to uphold its annual guidance despite ongoing aluminum price pressures that began earlier this year [1].

The firm noted that Reynolds Consumer Products has demonstrated resilience in the face of inflationary challenges, particularly within its aluminum-related operations. This stability has reinforced analyst confidence in the consumer goods manufacturer's ability to navigate current market conditions [1].

Reynolds Consumer Products Inc is a leading provider of household products, specializing in the production and sales of cooking products, waste and storage solutions, and tableware. The company operates through four key segments: Reynolds Cooking and Baking, Hefty Waste and Storage, Hefty Tableware, and Presto Products. Its product portfolio includes aluminum foil, disposable pans, parchment paper, plastic wrap, and various other kitchen essentials that cater to both branded and private-label markets [1].

With a market capitalization of $4.73 billion, REYN operates in the consumer cyclical sector, specifically within the packaging and containers industry. The stock currently trades at $22.49, representing a price-to-earnings ratio of 15.09x and a price-to-sales ratio of 1.3x. The company's beta of 0.79 suggests lower volatility compared to the broader market, which may appeal to risk-conscious investors [1].

Reynolds Consumer Products has also updated its FY 2025 earnings guidance, projecting earnings per share (EPS) between $1.540 and $1.610, slightly below the consensus estimate of $1.576. The company reported a quarterly EPS of $0.23, meeting expectations, while total revenue was down 1.8% year-on-year, totaling $801 million [2].

Analyst sentiment appears cautiously optimistic, with a consensus recommendation of 2.5 (on a scale where 1=Buy, 5=Sell) and an average price target of $26.14, representing potential upside of approximately 16% from current levels. Technical indicators show the stock trading above both its 20-day ($21.90) and 50-day ($21.81) moving averages, with an RSI-14 of 58.24 suggesting the stock is neither overbought nor oversold [1].

Institutional ownership stands at 22.77%, while insider ownership is minimal at 0.26%. Notably, there has been recent insider buying activity, with 5 purchases totaling 37,266 shares over the past three months and no insider sales during the same period [1].

The Beneish M-Score of -2.62 suggests the company is unlikely to be manipulating earnings, providing some comfort regarding financial reporting quality. However, investors should monitor several warning signs including the declining margin trends and slowing revenue growth [1].

The company's dividend yield of 4.1% appears attractive and is near its 10-year high, supported by a payout ratio of 59%. However, the lack of dividend growth over the past three years may concern income-focused investors [1].

Sector-specific risks include exposure to commodity price fluctuations (particularly aluminum), competitive pressures in the consumer packaged goods space, and potential margin compression from inflationary pressures. The stock's 24.63% annualized volatility suggests moderate price fluctuations should be expected [1].

While the company has demonstrated resilience in navigating recent challenges, investors should weigh the potential value opportunity against the various financial and operational headwinds facing the business. The combination of near-10-year lows in several valuation metrics and recent insider buying activity may warrant closer examination by value-oriented investors.

References:
[1] https://www.gurufocus.com/news/3026312/barclays-lifts-price-target-for-reynolds-consumer-products-reyn
[2] https://www.marketbeat.com/instant-alerts/reynolds-consumer-products-nasdaqreyn-updates-fy-2025-earnings-guidance-2025-07-30/