Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.1 |
| P/S | 9.5 |
| EV/EBITDA | 6.3 |
| Fwd P/E | 8.4 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 13.8x
- ▸PEG: 0.17
- ▸Attractively valued
REYN · Why this verdict
Why Reynolds Consumer Products (REYN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Reynolds Consumer Products offers an attractively valued packaging franchise with a PEG ratio of 0.15 and consistent earnings beats, but the stock has already reached and slightly exceeded analyst price targets while carrying 16% short interest, limiting near-term upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company trades at a forward P/E of 13.9x with a PEG ratio of 0.15, indicating the market is pricing in minimal growth for a company with an attractive earnings growth profile. Valuation breakdown | The stock's valuation multiple expands as earnings growth is recognized, pushing forward P/E above 16x within 12 months. | ↑Improving |
| CounterThe current price is already 6.6% above analyst consensus targets, suggesting the cheap multiple is partially explained by limited institutional demand at current levels. | ||
With a Piotroski F-Score of 8/9 and strong free cash flow quality, the company demonstrates solid financial integrity despite thin gross margins in a packaging business. Quality breakdown | Piotroski F-Score remains at 7 or above and free cash flow conversion stays above 90% of net income over the next four quarters. | →Stable |
| CounterGross margin component scores near the bottom of the quality dimension, reflecting the commodity-like nature of packaging that limits pricing power and profitability expansion. | ||
Reynolds has beaten earnings expectations in 3 of the last 4 quarters with an average positive surprise of 6.3%, and the most recent quarter saw a 14.5% beat, demonstrating consistent outperformance. Earnings | Beat streak continues in at least 3 of the next 4 quarters with average surprise remaining above 3%. | ↑Improving |
| CounterThe one inline result (0.09% surprise) shows the company can come in flat, and with high short interest at 16%, any stumble could trigger significant downward pressure. | ||
A short interest level of 16% of float combined with rising OBV and above-200-day moving average positioning sets up a potential squeeze scenario if continued positive results surprise bearish traders. Risk breakdown | Short interest falls below 10% over the next 12 months as negative thesis fails to materialize. | ↓Deteriorating |
| CounterHigh short interest at 16% combined with implied volatility of 119% signals that sophisticated market participants have strong conviction in a negative thesis, which historically has been accurate more often than not. | ||
The company trades at a forward P/E of 13.9x with a PEG ratio of 0.15, indicating the market is pricing in minimal growth for a company with an attractive earnings growth profile.
↑ImprovingValuation breakdown
- Expectation
- The stock's valuation multiple expands as earnings growth is recognized, pushing forward P/E above 16x within 12 months.
CounterThe current price is already 6.6% above analyst consensus targets, suggesting the cheap multiple is partially explained by limited institutional demand at current levels.
With a Piotroski F-Score of 8/9 and strong free cash flow quality, the company demonstrates solid financial integrity despite thin gross margins in a packaging business.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above and free cash flow conversion stays above 90% of net income over the next four quarters.
CounterGross margin component scores near the bottom of the quality dimension, reflecting the commodity-like nature of packaging that limits pricing power and profitability expansion.
Reynolds has beaten earnings expectations in 3 of the last 4 quarters with an average positive surprise of 6.3%, and the most recent quarter saw a 14.5% beat, demonstrating consistent outperformance.
↑ImprovingEarnings
- Expectation
- Beat streak continues in at least 3 of the next 4 quarters with average surprise remaining above 3%.
CounterThe one inline result (0.09% surprise) shows the company can come in flat, and with high short interest at 16%, any stumble could trigger significant downward pressure.
A short interest level of 16% of float combined with rising OBV and above-200-day moving average positioning sets up a potential squeeze scenario if continued positive results surprise bearish traders.
↓DeterioratingRisk breakdown
- Expectation
- Short interest falls below 10% over the next 12 months as negative thesis fails to materialize.
CounterHigh short interest at 16% combined with implied volatility of 119% signals that sophisticated market participants have strong conviction in a negative thesis, which historically has been accurate more often than not.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.1 |
| ROA | 4.7 |
| Gross margin | 1.0 |
| Op margin | 5.8 |
| Net margin | 4.5 |
| Current ratio | 6.4 |
| FCF quality | 5.4 |
| Moat | 5.0 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 71% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.7 |
| EPS growth | 6.2 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 7.7 |
- ▸Capitulation risk (RSI 11, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+1.3%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.7 |
| erm sentiment | 5.0 |
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 6.6 |
| growth rank | 2.1 |
- ▸Attractive P/E vs peers
Technical
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.8 |
| 52w position | 6.8 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 3.3 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 9.7 |
| debt equity | 6.7 |
- ▸Elevated put/call: 5.00
- ▸High IV: 97%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
| dividend safety | 6.5 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 3.8%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:63d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- ASYMMETRY:0.8<1.5@spot
Warning (0)
none
Reward-to-Risk
0.77
Upside
+4.1%
Downside
5.3%
Sizing output
AVOID
SetupOversold Bounce — Oversold RSI 11, near Bollinger lower, volume surge
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.9B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Technical at 8.9; weakest: Momentum at 2.8. No conviction either direction.
The strongest dimensions are Technical at 8.9, Value at 7.9, and Catalyst at 6.4; the weakest are Momentum at 2.8, Risk (lower is worse) at 4.0, and Growth at 4.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.77 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Valuation Discount To Growth
Trip ifForward P/E contracts below 12x or analyst price targets decline by more than 10% from current levels.
- P2Earnings Beat Momentum
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P3High Short Interest Squeeze Risk
Trip ifShort interest rises above 20% of float or the stock drops below $20.
- P4Balance Sheet Financial Health
Trip ifPiotroski F-Score drops below 6 in any reported period.