Walmart Deal Boosts Ranpak to $10 Target: Analyst

Craig-Hallum raised Ranpak's price target to $10 from $8 and maintained a Buy rating after the company announced a transformative deal with Walmart, significantly expanding their relationship. The firm believes the total size of the deal could be $700M-$800M, much larger than the $300M mentioned in the 8K. This agreement is a major validation for Ranpak and its protective packaging offering, and should be a positive catalyst for the stock.

Ranpak Holdings Corp. (NYSE: PACK) and Walmart have significantly expanded their strategic partnership, with Walmart deploying numerous Ranpak AutoFill™ systems across its Next Generation Fulfillment Centers. This multi-year agreement aims to enhance fulfillment speed, reduce packaging waste, and streamline operations for associates [1].

The expansion, which includes Walmart's fulfillment centers in Greencastle, PA, Joliet, IL, Lancaster, TX, and Stockton, CA, builds upon the existing collaboration at the McCordsville, IN center. The AutoFill™ system, introduced in 2021, uses AI-powered machine vision technology to optimize void filling and box closing, reducing waste and improving throughput [1].

"Our collaboration with Walmart represents a significant milestone for Ranpak," said Omar Asali, Chairman and CEO of Ranpak. "Walmart’s ongoing investment in automation reflects our shared commitment to reducing friction for associates while optimizing performance across the supply chain" [1].

Walmart Senior Vice President of Automation Engineering, Vik Gopalakrishnan, echoed the sentiment, noting that the AutoFill™ system offers a meaningful way to reduce packaging waste and expedite product delivery to customers [1].

The deal underscores Ranpak's growing influence in the e-commerce sector, following a similar agreement with Amazon in January. This partnership could contribute significantly to Ranpak's growth, with analysts estimating the total size of the deal at $700M-$800M, far exceeding the $300M mentioned in the 8K filing [2].

Ranpak's CEO, Omar Asali, highlighted the company's commitment to automation and AI, stating, "I know it’s fashionable to talk about AI, but we are taking those investments very seriously because we think that's going to be key to our journey in terms of winning market share and winning with big accounts" [2].

References:
[1] https://finance.yahoo.com/news/ranpak-walmart-join-forces-roll-113000501.html
[2] https://www.packagingdive.com/news/ranpak-ceo-omar-asali-walmart-partnership-autofill/758452/