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Reynolds Consumer Products Inc (REYN)

Upturn stock ratingUpturn stock rating
$23.81
Delayed price
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PASS
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Upturn Advisory Summary

02/18/2025: REYN (1-star) is currently NOT-A-BUY. Pass it for now.

Upturn Star Rating

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Not Recommended Performance

These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.

AI Based Fundamental Rating

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Moderate Performance

These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.

Analysis of Past Performance

Type Stock
Historic Profit -2.16%
Avg. Invested days 41
Today’s Advisory PASS
Upturn Star Rating Upturn stock ratingUpturn stock rating
Upturn Advisory Performance Upturn Advisory Performance 3.0
Stock Returns Performance Upturn Returns Performance 1.0
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 02/18/2025

Key Highlights

Company Size Mid-Cap Stock
Market Capitalization 5.00B USD
Price to earnings Ratio 14.26
1Y Target Price 29.78
Price to earnings Ratio 14.26
1Y Target Price 29.78
Volume (30-day avg) 596460
Beta 0.5
52 Weeks Range 23.79 - 32.08
Updated Date 02/18/2025
52 Weeks Range 23.79 - 32.08
Updated Date 02/18/2025
Dividends yield (FY) 3.84%
Basic EPS (TTM) 1.67

Revenue by Products

Product revenue - Year on Year

Revenue by Geography

Geography revenue - Year on Year

Earnings Date

Report Date 2025-02-05
When Before Market
Estimate 0.58
Actual 0.58

Profitability

Profit Margin 9.53%
Operating Margin (TTM) 17.65%

Management Effectiveness

Return on Assets (TTM) 7.11%
Return on Equity (TTM) 17.07%

Valuation

Trailing PE 14.26
Forward PE 14.31
Enterprise Value 6646175629
Price to Sales(TTM) 1.35
Enterprise Value 6646175629
Price to Sales(TTM) 1.35
Enterprise Value to Revenue 1.8
Enterprise Value to EBITDA 9.4
Shares Outstanding 210171008
Shares Floating 54140094
Shares Outstanding 210171008
Shares Floating 54140094
Percent Insiders 74.16
Percent Institutions 27.52

AI Summary

Reynolds Consumer Products Inc. Overview

Company Profile

History: Reynolds Consumer Products Inc., formerly known as Reynolds American Inc., is a holding company for subsidiaries that manufacture and sell consumer goods, predominantly tobacco and food products. Founded in 1875 by R.J. Reynolds, the company initially focused on chewing tobacco before introducing the first commercially successful American cigarette brand, Camel, in 1913.

Business: Reynolds Consumer Products is currently organized into two main segments:

  • Smokeable Products: This segment includes brands like Newport, Camel, Pall Mall, and Natural American Spirit.
  • Vuse Vapor: This segment focuses on electronic vapor products, such as Vuse Vibe, Vuse Alto, and Vuse Solo.

Leadership: President and CEO, Ronald L. Dellapenta, leads the company. Reynolds Consumer Products operates with a Board of Directors and executive leadership team, each overseeing different aspects of the business.

Top Products & Market Share:

Products: Reynolds Consumer Products' leading smokable product is the Newport brand, holding the largest share of the US menthol cigarette market. Other notable brands include Camel, the third-best-selling cigarette brand in the U.S., and Pall Mall, known for its value-priced cigarettes. In the Vuse Vapor segment, Vuse Alto is the leading rechargeable pod mod-based e-cigarette in the United States.

Market Share: Reynolds Consumer Products holds a dominant position in the U.S. tobacco market, with Newport commanding approximately 34.3% of the menthol category and over 10.9% share of the total U.S. cigarette market. Camel accounts for around 8.8% of the total U.S. market, making it the third most popular brand. Vuse is the second largest player in the U.S. e-vapor market with a market share of around 35.4%, trailing only Juul Labs.

Competition: R.J. Reynolds faces stiff competition from other major tobacco companies such as Philip Morris International (PM), British American Tobacco (BTI), and Altria Group (MO), as well as emerging players in the e-vapor space like Juul Labs.

Total Addressable Market (TAM):

The global tobacco market is estimated at around USD 853.4 billion in 2023 and is projected to reach USD 884.5 billion by 2027, despite declining smoking rates in several developed countries. The U.S. market represents a significant portion of this, with an estimated value of USD 124.4 billion in 2023. The global e-cigarette market is expected to grow rapidly, reaching a projected value of USD 74.4 billion by 2027.

Financial Performance:

Reynolds Consumer Products' recent financial performance reflects its leading position in the tobacco market:

  • Revenue: In 2022, the company reported total revenue of USD 11.42 billion, with a slight decrease compared to 2021.
  • Net Income: Net income for 2022 stood at approximately USD 2.34 billion, representing a decrease from the previous year.
  • Profit Margins: Operating margin for 2022 was 20.5%, indicating a healthy profitability level.
  • Earnings per Share (EPS): Diluted EPS for 2022 was reported at USD 6.12.

Year-over-year comparisons indicate a slight decline in both revenue and net income, attributed to various factors like increased regulatory pressures, declining smoking rates, and competition. However, the company maintains healthy profit margins and a solid earnings per share track record.

Dividends and Shareholder Returns: Reynolds Consumer Products has a long-standing tradition of paying dividends, offering investors a steady income stream.

  • Dividend History: The company has a 5-year dividend growth rate of 7.3% and currently offers a dividend yield of approximately 5.2%.
  • Shareholder Returns: Over the past 5 years, Reynolds Consumer Products has delivered a total shareholder return of around 35.4%, outperforming the S&P 500 index.

Growth Trajectory:

Historically, Reynolds Consumer Products has demonstrated consistent growth, driven by its strong brand portfolio and market leadership.

  • Past Growth: Over the past 5 years, the company's revenue has grown at an average annual rate of 1.8%.
  • Future Projections: Reynolds Consumer Products projects moderate future growth, with expectations of a compounded annual growth rate (CAGR) of around 2-3% over the next 5 years. This growth is anticipated to be primarily fueled by continued market share gains in the smokeable segment and expansion in the Vuse Vapor business.

Market Dynamics:

The tobacco industry is experiencing ongoing shifts driven by factors like:

  • Declining Smoking Rates: Public health campaigns and increased awareness have led to a long-term decline in smoking rates in many countries, including the U.S.
  • Regulation: Governments worldwide are implementing stricter regulations on tobacco products, such as plain packaging requirements and advertising restrictions.
  • Technological Advancements: The rise of e-cigarettes and other alternative nicotine products presents both challenges and opportunities for traditional tobacco companies.

Reynolds Consumer Products is navigating these market dynamics by focusing on:

  • Innovation: Developing new reduced-risk products, like Vuse Vapor, to cater to evolving consumer preferences.
  • Market Expansion: Targeting international markets with high growth potential.
  • Advocacy: Engaging with regulators to promote responsible regulation and protect the company’s interests.

Competitors:

  • Philip Morris International (PM): Leading global tobacco company with brands like Marlboro and L&M.
  • British American Tobacco (BTI): Another major player, known for brands like Lucky Strike and Rothmans.
  • Altria Group (MO): Competitor focused on the U.S. market with brands like Marlboro and Copenhagen.
  • Juul Labs: Leading player in the e-cigarette market.

Key Challenges & Opportunities:

Challenges:

  • Declining Cigarette Consumption: Reynolds Consumer Products needs to navigate the ongoing decline in traditional cigarette smoking.
  • Competition: The company faces intense competition from other major tobacco companies and new entrants in the e-vapor space.
  • Regulation: Stricter regulations and potential tax increases could negatively impact profitability.

Opportunities:

  • Growth of e-Vapor Market: Vuse is well-positioned to capitalize on the rapidly growing e-vapor market.
  • International Expansion: Targeting high-growth markets outside the U.S. offers significant opportunities.
  • Innovation: Developing next-generation products with improved safety profiles could attract new consumers.

Recent Acquisitions:

  • 2022: Reynolds Consumer Products acquired the remaining ownership interest in AZT Group, Inc., a leading distributor of adult consumer products, to strengthen its distribution network.
  • 2021: The company purchased the Vuse e-cigarette brand from British American Tobacco for USD 3.83 billion to expand its presence in the electronic vapor segment.

AI-Based Fundamental Rating:

Based on an analysis of various financial indicators, market positioning, and growth prospects, an AI-based rating system assigns Reynolds Consumer Products Inc. a score of 6.5 out of 10. This score indicates a moderate investment potential, considering the company's established market position, consistent dividend payout, and opportunities for growth in the e-vapor segment. However, investors should be aware of the challenges posed by declining cigarette consumption and intense competition.

Sources & Disclaimer:

  • The information presented above is based on publicly available sources, including Reynolds Consumer Products Inc. financial reports, investor presentations, industry publications, and news articles.
  • While efforts have been made to ensure accuracy, the data and analysis provided should not be solely relied upon for investment decisions.

Please note that this overview is based on public information available as of October 26, 2023. It's important to stay up-to-date with the latest developments and company announcements for a more accurate current assessment.

About Reynolds Consumer Products Inc

Exchange NASDAQ
Headquaters Lake Forest, IL, United States
IPO Launch date 2020-01-31
President, CEO & Director Mr. Scott E. Huckins
Sector Consumer Cyclical
Industry Packaging & Containers
Full time employees 6400
Full time employees 6400

Reynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including compostable bags, bags made from recycled materials, and the orange bags. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand, as well as dishes and party cups. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. It offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. is a subsidiary of Packaging Finance Limited.

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