Core Viewpoint - The article emphasizes the importance of value investing and highlights Reynolds Consumer Products (REYN) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][4][6] Group 1: Value Investing Strategy - Value investing is a popular strategy that relies on traditional analysis of key valuation metrics to identify undervalued stocks [2] - Zacks has developed the Style Scores system to identify stocks with specific traits, particularly those with high grades in the "Value" category [3] Group 2: Reynolds Consumer Products (REYN) Metrics - REYN currently has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4] - The stock has a P/E ratio of 14.15, which is lower than the industry average of 16.84, suggesting it may be undervalued [4] - REYN's Forward P/E has fluctuated between 13.14 and 18.25 over the past year, with a median of 14.50 [4] - The P/CF ratio for REYN is 10.87, significantly lower than the industry average of 15.65, indicating a favorable cash flow outlook [5] - Over the past year, REYN's P/CF has ranged from 9.57 to 13.89, with a median of 10.88 [5] Group 3: Overall Assessment - The combination of REYN's attractive valuation metrics and strong earnings outlook suggests that the stock is likely undervalued at present [6]

Core Viewpoint - The market anticipates Reynolds Consumer Products (REYN) to report a year-over-year increase in earnings despite lower revenues in its upcoming earnings report for the quarter ended December 2025 [1] Earnings Expectations - The consensus EPS estimate for the upcoming report is $0.60 per share, reflecting a year-over-year increase of +3.5% [3] - Expected revenues are projected at $1.01 billion, which is a decrease of 0.7% from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised 12% higher in the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12] Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10] - Reynolds Consumer Products currently holds a Zacks Rank of 2, but the combination with a 0% Earnings ESP makes it challenging to predict an earnings beat [12][13] Historical Performance - In the last reported quarter, the company exceeded the expected earnings of $0.39 per share by delivering $0.42, resulting in a surprise of +7.69% [14] - Over the past four quarters, Reynolds Consumer Products has beaten consensus EPS estimates two times [15] Market Reaction Factors - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment [16] - It is advisable for investors to consider the Earnings ESP and Zacks Rank before the quarterly release to enhance the likelihood of successful investment decisions [17]

Core Viewpoint - The article highlights Reynolds Consumer Products (REYN) as a strong value stock, supported by its favorable Zacks Rank and valuation metrics [4][6]. Group 1: Company Overview - Reynolds Consumer Products (REYN) has a Zacks Rank of 2 (Buy) and an "A" grade in the Value category, indicating strong potential for value investors [4][6]. - The stock has a current P/E ratio of 14.15, which is lower than the industry average P/E of 16.01, suggesting it may be undervalued [4]. - Over the past 12 months, REYN's Forward P/E has fluctuated between 13.14 and 18.25, with a median of 14.50, indicating variability in its valuation [4]. Group 2: Financial Metrics - REYN's P/CF ratio stands at 10.87, significantly lower than the industry average P/CF of 15.09, further supporting the notion of undervaluation [5]. - The P/CF ratio for REYN has ranged from a low of 9.57 to a high of 13.89 over the last year, with a median of 10.88, reflecting its cash flow strength [5]. - These metrics collectively suggest that REYN is likely undervalued and stands out as one of the strongest value stocks in the market [6].

Core Insights - Reynolds Consumer Products reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing a slight increase from $0.41 per share a year ago, resulting in an earnings surprise of +7.69% [1] - The company achieved revenues of $931 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.60% and reflecting a year-over-year increase from $910 million [2] - The stock has underperformed the market, losing approximately 12.2% since the beginning of the year, while the S&P 500 has gained 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $992.49 million, and for the current fiscal year, it is $1.57 on revenues of $3.65 billion [7] - The estimate revisions trend for Reynolds Consumer Products was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Consumer Products - Discretionary industry is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Total net revenues increased by 2% to $931 million for the three months ended September 30, 2025, compared to $910 million in the same period in 2024[88]. - Net income decreased by 8% to $79 million for the three months ended September 30, 2025, down from $86 million in the same period in 2024[89]. - Adjusted EBITDA for the three months ended September 30, 2025, was $168 million, compared to $171 million in the same period in 2024[96]. - Net income for the nine months ended September 30, 2025, decreased by 20% to $184 million, down from $231 million in the same period in 2024[90]. - Adjusted diluted EPS for the three months ended September 30, 2025, was $0.42, compared to $0.41 in the same period in 2024[97]. - Total net revenues for the three months ended September 30, 2025, increased by $21 million, or 2%, to $931 million, primarily driven by higher pricing related to input costs[107]. - Gross profit for the three months ended September 30, 2025, decreased by $6 million, or 3%, to $233 million, with a gross margin of 25%[106]. - Adjusted EBITDA for the three months ended September 30, 2025, decreased by $3 million, or 2%, to $168 million, impacted by lower volume[112]. - For the nine months ended September 30, 2025, total net revenues increased by $12 million, or less than 1%, to $2,687 million[131]. - Total net revenues increased by $12 million, or 0.5%, to $2,687 million, primarily driven by higher pricing related to input costs[132]. - Adjusted EBITDA decreased by $18 million, or 4%, to $447 million, mainly due to lower retail volume and higher material costs[138]. - Cost of sales increased by $62 million, or 3%, to $2,039 million, driven by higher input and manufacturing costs[133]. Segment Performance - The Reynolds Cooking & Baking segment generated $308 million in net revenues for the three months ended September 30, 2025, up from $294 million in 2024[102]. - The Hefty Waste & Storage segment reported net revenues of $266 million for the three months ended September 30, 2025, compared to $253 million in 2024[102]. - The Hefty Tableware segment achieved net revenues of $200 million for the three months ended September 30, 2025, an increase from $222 million in 2024[102]. - Hefty Waste & Storage segment net revenues increased by $13 million, or 5%, to $266 million, attributed to higher volume[116]. - Hefty Tableware segment net revenues decreased by $22 million, or 10%, to $200 million, primarily due to lower foam volume[118]. - Presto Products segment net revenues increased by $13 million, or 9%, to $163 million, driven by higher volume[121]. - Reynolds Cooking & Baking segment net revenues increased by $21 million, or 2%, to $862 million, with retail revenues down by $18 million[140]. - Hefty Waste & Storage segment net revenues increased by $29 million, or 4%, to $761 million, primarily driven by increased volume[142]. - Hefty Tableware segment net revenues decreased by $59 million, or 9%, to $622 million, attributed to lower foam volume[144]. - Presto Products segment net revenues increased by $16 million, or 4%, to $460 million, driven by higher volume[146]. Cash Flow and Dividends - Net cash provided by operating activities decreased by $67 million to $240 million, primarily due to lower net income[151]. - Cash dividends declared during the three and nine months ended September 30, 2025, were $0.23 and $0.69 per share, respectively[171]. - The company expects to continue paying cash dividends quarterly, subject to the discretion of the Board of Directors and dependent on various financial factors[171]. - The company believes its projected cash position and cash flows from operations are sufficient to meet debt service, capital expenditures, and working capital needs for the foreseeable future[173]. Debt and Obligations - As of September 30, 2025, the outstanding balance under the Term Loan Facility was $1,636 million, with no borrowings under the Revolving Facility[155]. - As of September 30, 2025, the amount of obligations outstanding under the Supply Chain Finance program was $10 million, down from $12 million as of December 31, 2024[170]. - Interest expense, net decreased by $4 million, or 16%, to $21 million, due to a lower outstanding principal balance[109]. - Interest expense, net decreased by $13 million, or 17%, to $63 million due to lower outstanding principal balance[135]. Market Position and Sustainability - The company holds the 1 market position in the U.S. consumer foil market with Reynolds Wrap, capturing over 50% market share in most categories[85]. - The company is focused on sustainable solutions, including products made from recycled materials and compostable options across its segments[86]. - There have been no material changes in the company's exposure to market risk during the nine months ended September 30, 2025[178].

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [16] - Adjusted EBITDA was $168 million compared to $171 million in the year-ago period, reflecting improved results in all operating segments [17] - Adjusted EPS was $0.42 versus $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [17] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [16] - Reynolds Wrap retail sales were up 7%, with volumes outperforming the category [9] - Hefty brand, a nearly $2 billion brand, continues to lead in the scented waste bag segment, driving growth in the waste bag category [11][12] Market Data and Key Metrics Changes - The operating environment remains challenging, with low and middle-income consumers under pressure and retailers facing cost inflation [8] - The company noted that inflation remains above the Fed's target, impacting consumer sentiment negatively [34] Company Strategy and Development Direction - The company is focusing on innovation and revenue growth management to drive share gains and profitability [39] - New leadership, including a Chief Commercial Officer and Chief Operations Officer, is expected to enhance operational capabilities and drive growth [14][39] - The company is investing in high-return projects to support growth and improve margins [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the promotional environment and addressing consumer pressures [31][34] - The company anticipates a flat to down 1% revenue outlook for the full year compared to 2024, with adjusted EBITDA guidance of $655 million to $665 million [19] - Management highlighted the importance of maintaining cost discipline and leveraging U.S.-centric manufacturing advantages [8][19] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [7] - New product innovations, such as Reynolds Kitchens Air Fryer Liners, have been recognized for their growth potential [10] Q&A Session Summary Question: How do you see the setup for the important holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste and food bags but feels confident in navigating the environment, with Hefty Waste Bags outperforming the category [31][32][34] Question: Why did you flag the risk of retailers shifting store brands to other suppliers? - Management indicated that economic challenges and tariff uncertainties could lead retailers to seek value through private label business, but they expect to win more than they lose as a U.S.-centric manufacturer [35] Question: Can you discuss the long-term strategy related to operational capabilities and growth? - Management emphasized the focus on innovation, revenue growth management, and driving additional share at the customer level as key components of their strategy [39][40] Question: What is the outlook for the tableware business and foam headwinds? - Management stated that foam headwinds are expected to lessen next year, and they are pleased with how profitability is being managed despite volume declines [45] Question: Can you comment on the promotional impact in the Hefty Waste and Storage segment? - Management acknowledged increased promotional intensity but highlighted that their promotional activity aligns with overall company levels, contributing to strong performance [48] Question: What is the current state of consumer behavior and its impact on Reynolds Cooking and Baking? - Management noted modest tailwinds from increased cooking at home but also acknowledged the impact of rising prices in the marketplace [66]

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [16] - Adjusted EPS was $0.42 compared to $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [17] - Consolidated adjusted EBITDA was $168 million compared to $171 million in the year-ago period [17] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [16] - Reynolds Wrap retail sales were up 7%, with volumes outperforming the category [9] - Hefty Waste Bags saw retail takeaways increase by 9%, outperforming the category by 10 points [31] Market Data and Key Metrics Changes - The operating environment remains challenging, particularly for low and middle-income consumers facing cost inflation [8] - The company noted that inflation remains around 3%, above the Fed's target of 2% [33] - Consumer sentiment has declined, with double-digit decreases year to date heading into the holidays [33] Company Strategy and Development Direction - The company is focusing on innovation and revenue growth management to drive share gains and profitability [39] - A new Chief Commercial Officer is leading growth programs to enhance market share across major customers [9] - The company is investing in high-return projects to support growth and drive margin improvements [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in retail trends and the effectiveness of implemented programs to drive near and long-term results [19] - The company anticipates net revenues to be flat to down 1% for the full year compared to 2024 [19] - Management highlighted the importance of maintaining cost discipline in all areas, including SG&A [19] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [7] - New product innovations, such as Reynolds Kitchens Air Fryer liners, have been recognized for their growth potential [10] - The company is positioned well within its target leverage range of 2x-2.5x EBITDA, allowing for continued investment in growth opportunities [21] Q&A Session Summary Question: How do you see the setup for the important holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste and food bags but feels confident in navigating the promotional environment [31][32] - Consumer sentiment remains under pressure, with inflation and cooling labor markets impacting lower-income demographics [33][34] Question: Can you elaborate on the risk of retailers shifting store brands to other suppliers? - Management flagged this risk due to economic challenges and uncertainty in supply chains, but expects to win more than lose as a US-centric manufacturer [34] Question: What is the grand plan related to operational capabilities and long-term growth? - The company is focused on driving growth through innovation, revenue growth management, and share gains at the customer level [39] Question: What is the outlook for the tableware business and foam products? - The tableware business is down primarily due to foam headwinds, but profitability has increased despite volume declines [42][43] Question: How is the Hefty Waste and Storage segment performing in terms of profitability and distribution? - The segment continues to perform well, with significant volume growth and effective management of promotional activities [46][47] Question: What is the current state of consumer behavior regarding dining out versus cooking at home? - There are modest tailwinds from increased cooking at home, but rising prices in the marketplace are also a factor [64]

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [15] - Adjusted EBITDA was $168 million compared to $171 million in the year-ago period, reflecting improved results in all operating segments [16] - Adjusted EPS was $0.42 versus $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [16] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [15] - Hefty Waste Bags and Reynolds Wrap aluminum foil were highlighted as strong performers, with Hefty Waste Bags year-to-date retail takeaways up 9% [26][10] - The tableware business grew EBITDA despite sales volumes being down 13%, demonstrating increasing success in driving profitability [16][39] Market Data and Key Metrics Changes - The operating environment remains challenging, particularly for low and middle-income consumers facing cost inflation [6][28] - The company noted a shift in consumer behavior, with more affluent consumers tending to be brand loyalists while lower-income demographics are more value-oriented [28][45] Company Strategy and Development Direction - The company is focusing on innovation, revenue growth management, and driving additional share at the customer level [33] - New leadership, including a Chief Commercial Officer and Chief Operations Officer, is expected to enhance growth programs and operational efficiency [8][12] - The company is investing in high-return projects to support growth and drive margin improvements [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the continued pressure on consumers and the potential for increased promotional activity in certain categories [28][26] - The company remains confident in its ability to navigate the promotional environment and expects to leverage its U.S.-centric manufacturing footprint as a competitive advantage [6][29] - For the full year, the company expects net revenues to be flat to down 1% compared to 2024, with adjusted EBITDA guidance of $655 million to $665 million [18] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [5][12] - The company has implemented pricing actions to recover commodity and tariff impacts, with gross profit showing sequential improvement [16][17] Q&A Session Summary Question: How do you see the setup for the holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste bags and food bags but feels confident in navigating the promotional environment, with retail takeaways for Hefty Waste Bags up 9% year-to-date [26][28] Question: Why did you flag the risk of retailers shifting store brands to other suppliers? - Management indicated that in a challenging economic climate, retailers may seek to drive value for consumers by shifting to private label business, but expects to win more than lose as a U.S.-centric manufacturer [29] Question: Can you discuss the impact of operational changes on long-term growth? - Management highlighted the addition of key executives aimed at driving growth through innovation and revenue growth management tools, with a focus on optimizing promotional spending [33][60] Question: What is the outlook for the tableware business and foam products? - Management stated that 80% of the decline in tableware was due to foam headwinds, but they are managing profitability effectively despite volume declines [39] Question: How is the Hefty Waste and Storage segment performing in the current environment? - Management noted that innovation and being a performance brand are driving success in the Hefty Waste and Storage segment, with significant volume growth [58]

Q3 2025 Financial Performance - Net Revenues reached $931 million[16] - Adjusted EBITDA was $168 million[16] - Adjusted EBITDA margin was 18%[16] Segment Performance (Q3 2025) - Reynolds Cooking & Baking: Net Revenues of $308 million, Adjusted EBITDA of $53 million, with a 17% margin[16] - Hefty Waste & Storage: Net Revenues of $266 million, Adjusted EBITDA of $74 million, with a 28% margin[16] - Hefty Tableware: Net Revenues of $200 million, Adjusted EBITDA of $29 million, with a 15% margin[16] - Presto Products: Net Revenues of $163 million, Adjusted EBITDA of $35 million, with a 21% margin[16] Year-to-Date (YTD) 2025 Financials - Net Revenues totaled $2,687 million[18] - Adjusted EBITDA amounted to $447 million[18] - Adjusted EBITDA margin was 17%[18] Q4 2025 Outlook - Net Revenues are expected to decrease by 1% to 5%[21] - Net Income is projected to be between $110 million and $118 million[21] - Adjusted EBITDA is forecasted to be between $208 million and $218 million[21] Full Year 2025 Outlook - Net Revenues are expected to be flat to down 1%[22] - Net Income is projected to be between $294 million and $302 million[22] - Adjusted EBITDA is forecasted to be between $655 million and $665 million[22]

Financial Performance - Net Revenues for Q3 2025 were $931 million, a 2% increase from $910 million in Q3 2024, with Retail Net Revenues up 1% to $864 million[5]. - Adjusted Net Income for Q3 2025 was $88 million, compared to $86 million in Q3 2024, while Net Income decreased to $79 million from $86 million in the prior year[4]. - Adjusted EBITDA for Q3 2025 was $168 million, down from $171 million in Q3 2024, reflecting lower volumes but improved pricing alignment[4]. - Year-to-date 2025 Adjusted Net Income was $220 million, down from $231 million in the comparable prior year period, impacted by a discrete tax benefit in 2024[11]. - Net income for the nine months ended September 30, 2025, was $184 million, a decrease of 20.3% compared to $231 million for the same period in 2024[28]. - Total revenues for the nine months ended September 30, 2025, reached $2,687 million, up from $2,675 million in 2024, representing a growth of 0.4%[30]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $447 million, down from $465 million in 2024, indicating a decline of 3.9%[40]. - The company projects Q4 2025 net income guidance between $110 million and $118 million, with adjusted EBITDA guidance ranging from $208 million to $218 million[48]. - For the fiscal year 2025, net income guidance is set between $294 million and $302 million, with adjusted net income projected between $337 million and $345 million[53]. Debt and Equity - The Company reported a Net Debt of $1,576 million, with a Net Debt to Trailing Twelve Months Adjusted EBITDA ratio of 2.4x as of September 30, 2025[12]. - As of September 30, 2025, total debt was $1,629 million, with net debt calculated at $1,576 million, resulting in a net debt to trailing twelve months adjusted EBITDA ratio of 2.4x[47]. - The company executed a term loan refinancing, resulting in proceeds of $743 million and repayments of existing term loans of the same amount[28]. - The total stockholders' equity rose to $2,180 million as of September 30, 2025, from $2,142 million as of December 31, 2024, reflecting an increase of 1.8%[26]. - The company reported a decrease in interest expense from $98 million in 2024 to $86 million in 2025[45]. Operational Metrics - Retail volume for Reynolds Cooking & Baking decreased 3%, while Hefty Waste & Storage saw a 5% increase in retail volume driven by distribution gains[6][7]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $240 million, a decrease of 21.8% from $307 million in 2024[28]. - Inventories increased to $639 million as of September 30, 2025, compared to $567 million as of December 31, 2024, marking an increase of 12.7%[26]. - The company incurred $10 million in debt refinancing expenses and $33 million in CEO transition and strategic initiatives costs for the fiscal year 2025[53]. Future Outlook - The Company expects full-year 2025 Net Revenues to be flat to down 1% compared to 2024's $3,695 million, with Adjusted EBITDA projected between $655 million and $665 million[13]. - The Company anticipates Q4 2025 Net Revenues to decline by 1% to 5% compared to Q4 2024's $1,021 million, with Adjusted EBITDA expected between $208 million and $218 million[14]. - The company anticipates continued focus on strategic initiatives and cost savings to enhance future performance[38]. - The diluted shares outstanding for the fiscal year 2025 is projected at 210.3 million, with diluted EPS guidance between $1.40 and $1.44[53]. Dividend Information - The Board of Directors approved a quarterly dividend of $0.23 per common share, expected to be paid on November 28, 2025[17]. Depreciation and Amortization - Depreciation and amortization expenses increased slightly from $129 million in 2024 to $133 million in 2025[45].