Reynolds Consumer Products Beats Estimates as Volumes Fall 7%

Reynolds Consumer Products earned $0.39 per share in the third quarter, a penny above the $0.38 analysts expected, on revenue of $944 million versus the $939.23 million consensus. That's the headline beat, but the quarter underneath it tells a tougher story: retail volume fell 7% and adjusted EPS slipped from $0.42 a year ago.

What drove the numbers?

Revenue rose 1.4% year over year, climbing from $931 million to $944 million, because pricing more than offset the volume decline. Management attributed the 7% drop in retail volume to commodity-driven price increases weighing on demand, a pressured consumer, and heightened competition.

Profitability compressed modestly. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell to $163 million from $168 million a year earlier. The company posted a net margin of 9.11% and a return on equity of 16.03%.

On the call, management said supply-chain productivity and pricing are helping offset inflation and volume declines. They still peg the estimated incremental annualized commodity headwind at about $400 million. In plain terms: pricing and efficiency are doing the work that shrinking volumes aren't.

What's the outlook and the balance sheet?

Reynolds reaffirmed its 2026 guidance: adjusted EBITDA of $660 million to $675 million and adjusted EPS of $1.57 to $1.63.

The company also highlighted innovation and distribution gains — 10 points of distribution growth for Hefty waste bags and double-digit retail dollar takeaway growth in foil. It completed the Owl's Head Alloys acquisition to further integrate aluminum processing, though it expects limited impact on 2026 results.

On the balance sheet, the debt-to-equity ratio stands at 0.66, with a quick ratio of 0.71 and a current ratio of 1.80.

What does the dividend look like?

The board declared a quarterly dividend of $0.23 per share, payable Monday, November 30, to investors of record on the ex-dividend date of Monday, November 16. That's $0.92 annualized, a 3.6% yield, with a payout ratio of 56.10%.

How did the market and analysts respond?

The stock traded up $1.12 in midday trading Wednesday, reaching $25.21 on volume of 2,406,827 shares — roughly double its average of 1,200,026. The 52-week range runs from $20.44 to $27.32, with a 50-day moving average of $22.58 and a 200-day average of $23.23. The market cap sits at $5.31 billion, with a PE ratio of 15.37 and a beta of 0.56.

The analyst crowd stayed cautious:

• JPMorgan Chase raised its price target from $23.00 to $27.00 with a "neutral" rating on July 16
• UBS Group reiterated "neutral" and set a $24.00 target on October 27
• Canaccord Genuity lifted its target from $24.00 to $25.00 with a "hold" rating on July 30
• Barclays cut its target from $26.00 to $23.00 with an "equal weight" rating on October 15
• Weiss Ratings restated a "hold (c)" rating on September 25

One analyst rates the stock a Buy and seven rate it a Hold, for an average rating of "Hold" and an average price target of $24.60, per MarketBeat data.

A modest beat, a reaffirmed outlook and a steady dividend — but seven of eight analysts still aren't chasing it.