Reynolds Consumer Products Inc. (REYN) stock intrinsic value fair value estimate & owner earnings analysis

Reynolds Consumer Products makes and sells Reynolds Wrap aluminum foil and baking products (sold as Alcan in Canada), Hefty waste bags, storage bags and disposable tableware, and store-brand food storage bags, trash bags and plastic wrap through its Presto Products segment, mainly to U.S. retailers. Revenue has been very stable at about $3.7 billion a year since 2022 ($3,817M in 2022, $3,756M in 2023, $3,695M in 2024, $3,721M in 2025). Earnings power. We measure earnings as cash from operations, less the cash swings in inventory, receivables and payables, less stock compensation, less the part of capital spending needed just to keep the plants running. On that basis earnings per share were about $1.93 in 2020, $1.55 in 2021, $1.23 in 2022, $1.49 in 2023, $1.66 in 2024 and $1.37 in 2025. 2020 and 2021 precede the flat-sales period and 2021-2022 included large inventory build-ups, so we anchor on 2022 through 2025 as the business exists today, which gives about $1.43 per share (the median of those four years). Years before the 2020 listing were not used. Growth check. Owner earnings per share fell about 17% in 2025 (from $1.66 to $1.37), mainly because capital spending rose to $161M from $120M. We assume no growth from that level, not a rebound; the anchor is a multi-year median, so it is not lifted by the 2024 high. We credit no growth at all: sales have been flat for four years, and new products, share gains and pricing are not secured. Amortization of acquired intangibles is a non-cash charge that is already excluded from cash earnings; we treat the brands as lasting rather than wasting because Reynolds and Hefty are long-established household names. Base case: $24 per share. Earnings stay at about $1.43 per share indefinitely, discounted at 6%. The evidence is the flat multi-year record and the brand position in foil and bags; no growth and no decline are assumed. Bear case: $13 per share. The largest customer and its affiliates account for 48% of revenue (unchanged in 2023, 2024 and 2025), so a loss of shelf space or a price concession is a visible risk. Raw materials (aluminum and resin) are exposed to tariffs and cost swings, and the company says retailer leverage constrains its ability to pass through price increases. It also carries $1,586M of term-loan debt (maturing 2032) whose interest is paid from cash flow. We assume earnings drop to about $1.05 per share (below the lowest year of $1.23) and then erode about 2% a year. Bull case: $29 per share. Earnings reach about $1.75 per share, modestly above the 2024 high of $1.66, if pricing offsets cost inflation and capital spending returns to its 2023-2024 level of roughly $105M-$120M, then stay flat. What would make this wrong: sustained loss of volume at the largest retail customer, or aluminum and resin cost increases that cannot be passed through, would push toward the bear case. Capital spending running at 2025 levels permanently rather than temporarily would lower the base case.