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Ball Corp (BLL) Shares Up 17% YTD: What's Driving the Rally?
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Shares of Ball Corporation have outperformed the industry so far this year on solid beverage-can demand, capacity expansion, introduction of fresh products, acquisitions, upbeat second quarter results and solid backlog levels in the Aerospace segment. The stock has gained 17.3% year to date, outperforming the industry’s growth of 14.4%.
The company has a market cap of $23.9 billion. It has an expected long-term earnings per share growth rate of 5%. It has a trailing four-quarter average earnings surprise of 4%.
Let’s delve deeper and analyze the reasons behind the company’s impressive price performance and find out if there is room for further appreciation.
Earnings Beat Consensus Mark in Q2
Ball Corporation reported second-quarter 2020 adjusted earnings of 65 cents per share, beating the Zacks Consensus Estimate of 57 cents. The bottom line also improved 1.6% on a year-over-year basis.
Healthy Growth Projections
The Zacks Consensus Estimate for Ball Corporation’s current-year earnings per share is pegged at $2.77, indicating year-over-year growth of 9.49%. The same has moved 4.1% north over the past 30 days.
Driving Factors
Global beverage-can demand continues to shoot up as consumers now prefer cans over glass and plastic. Thus, the company has been primarily investing in aluminum packaging production, in a bid to cater to the rising demand. Ball Corporation’s recently-launched infinity bottle will provide sustainable solution for personal care products, as customers are shifting from small- to mid-sized plastic containers at hotels and stores. The company expects its previously-announced aluminum beverage can and cup projects to add at least 8 billion units of capacity by the end of 2021.
This March, the company entered into an agreement to acquire an aluminum aerosol packaging business, Tubex, for $80 million. The transaction is expected to close in third-quarter 2020 and will enable the company to extend its geographic reach of the aluminum aerosol packaging business in Brazil. Moreover, the acquisition aids the company’s global aluminum aerosol and slug business in Europe, North America and Asia.
Ball Corporation maintains its expectation to deliver long-term diluted earnings per share growth of at least 10-15% beyond 2020 and achieve EVA (economic value added) dollars growth of 4-8% per year.
The company provides key aluminum packaging products and services to consumer-oriented end-markets, such as food and beverages, household and healthcare. Thus, demand has been fairly stable amid the COVID-19 pandemic. Also, higher at-home consumption amid the pandemic is anticipated to further support the company’s top-line performance.
The Beverage packaging, North and Central America segment is expected to gain on new customer contracts, operational efficiency, strong demand for aluminum beverage packaging and increased availability of cans. The Beverage Packaging, EMEA segment will likely gain from multiple beverage-can line additions that will be executed across the existing European plant network in the ongoing year and beyond in order to meet demand. The Beverage Packaging, South America segment will gain on increasing preference for aluminum beverage packaging over other options.
Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. The company’s cost-cutting actions will also bolster its margins. Further, it has taken actions to improve operational performance in the aluminum aerosol business, while initiating additional products to expand its aerospace infrastructure and testing capabilities.
The Aerospace segment’s contracted backlog remains solid at $2.1 billion as of second-quarter 2020 end. Contracts already won, but not yet booked into the current contracted backlog, reflect a sequential increase of 10% to $5.3 billion. The segment continues to win and provide mission-critical programs and technologies to the U.S. government, defense, intelligence, reconnaissance and surveillance customers. Multiple projects to expand the company’s manufacturing capacity, test capabilities, and engineering and support space are also likely to stoke growth.
Zacks Rank & Stocks to Consider
Ball Corporation currently carries a Zacks Rank #3 (Hold)
Silgan has a projected earnings growth rate of 28.7% for 2020. The company’s shares have gained 22% so far this year.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 37% in the past year.
SiteOne Landscape has an expected earnings growth rate of 15.4% for the current year. The stock has appreciated 41% year to date.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Ball Corp (BLL) Shares Up 17% YTD: What's Driving the Rally?
Shares of Ball Corporation have outperformed the industry so far this year on solid beverage-can demand, capacity expansion, introduction of fresh products, acquisitions, upbeat second quarter results and solid backlog levels in the Aerospace segment. The stock has gained 17.3% year to date, outperforming the industry’s growth of 14.4%.
The company has a market cap of $23.9 billion. It has an expected long-term earnings per share growth rate of 5%. It has a trailing four-quarter average earnings surprise of 4%.
Let’s delve deeper and analyze the reasons behind the company’s impressive price performance and find out if there is room for further appreciation.
Earnings Beat Consensus Mark in Q2
Ball Corporation reported second-quarter 2020 adjusted earnings of 65 cents per share, beating the Zacks Consensus Estimate of 57 cents. The bottom line also improved 1.6% on a year-over-year basis.
Healthy Growth Projections
The Zacks Consensus Estimate for Ball Corporation’s current-year earnings per share is pegged at $2.77, indicating year-over-year growth of 9.49%. The same has moved 4.1% north over the past 30 days.
Driving Factors
Global beverage-can demand continues to shoot up as consumers now prefer cans over glass and plastic. Thus, the company has been primarily investing in aluminum packaging production, in a bid to cater to the rising demand. Ball Corporation’s recently-launched infinity bottle will provide sustainable solution for personal care products, as customers are shifting from small- to mid-sized plastic containers at hotels and stores. The company expects its previously-announced aluminum beverage can and cup projects to add at least 8 billion units of capacity by the end of 2021.
This March, the company entered into an agreement to acquire an aluminum aerosol packaging business, Tubex, for $80 million. The transaction is expected to close in third-quarter 2020 and will enable the company to extend its geographic reach of the aluminum aerosol packaging business in Brazil. Moreover, the acquisition aids the company’s global aluminum aerosol and slug business in Europe, North America and Asia.
Ball Corporation maintains its expectation to deliver long-term diluted earnings per share growth of at least 10-15% beyond 2020 and achieve EVA (economic value added) dollars growth of 4-8% per year.
The company provides key aluminum packaging products and services to consumer-oriented end-markets, such as food and beverages, household and healthcare. Thus, demand has been fairly stable amid the COVID-19 pandemic. Also, higher at-home consumption amid the pandemic is anticipated to further support the company’s top-line performance.
The Beverage packaging, North and Central America segment is expected to gain on new customer contracts, operational efficiency, strong demand for aluminum beverage packaging and increased availability of cans. The Beverage Packaging, EMEA segment will likely gain from multiple beverage-can line additions that will be executed across the existing European plant network in the ongoing year and beyond in order to meet demand. The Beverage Packaging, South America segment will gain on increasing preference for aluminum beverage packaging over other options.
Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. The company’s cost-cutting actions will also bolster its margins. Further, it has taken actions to improve operational performance in the aluminum aerosol business, while initiating additional products to expand its aerospace infrastructure and testing capabilities.
The Aerospace segment’s contracted backlog remains solid at $2.1 billion as of second-quarter 2020 end. Contracts already won, but not yet booked into the current contracted backlog, reflect a sequential increase of 10% to $5.3 billion. The segment continues to win and provide mission-critical programs and technologies to the U.S. government, defense, intelligence, reconnaissance and surveillance customers. Multiple projects to expand the company’s manufacturing capacity, test capabilities, and engineering and support space are also likely to stoke growth.
Zacks Rank & Stocks to Consider
Ball Corporation currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. (SLGN - Free Report) , IIVI Incorporated and SiteOne Landscape Supply, Inc. (SITE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Silgan has a projected earnings growth rate of 28.7% for 2020. The company’s shares have gained 22% so far this year.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 37% in the past year.
SiteOne Landscape has an expected earnings growth rate of 15.4% for the current year. The stock has appreciated 41% year to date.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>