We issued an updated research report on Bemis Company, Inc. on Jul 4, 2016. Impact of operational inefficiencies in its Latin-American business remains the major drag on the company’s performance. Foreign currency headwinds, fluctuations in raw material prices and strong competition remain concerns.
Notably, Bemis’ global packaging segment witnessed year over year decline in operating profit in the last three quarters mainly due to Latin American business. The company’s Latin-American rigid business which includes products such as tubs for margarine, yogurt and ice cream, did not perform well operationally during first-quarter 2016.
Customer orders were softer in the quarter due to producers' aggressive pricing actions that were initially resisted by the retailers. This will affect Bemis’ earnings during the second quarter. The company also lowered the upper end of the full-year adjusted earnings per share guidance range to $2.68–$2.78 due to the effect of operational inefficiencies in its Latin-American business as well as the North-American healthcare business.
Bemis remains concerned that foreign currency headwinds would persist through the rest of the year. Given that the company has a significant footprint in Latin America, majority of the headwinds from the Brazil Real will occur in the first two quarters of 2016.
Operationally, Bemis’ U.S. business made great progress on margins during the first quarter -- a good portion of which was driven by the asset recapitalization program. However, the company does not expect future improvements at this exceptionally high pace.
Further, the major markets in which Bemis sells its products are highly competitive. Areas of competition include service, innovation, quality and price. This competition is significant in terms of both size and number of the competing firms. Moreover, fluctuations in raw material prices may hurt the company’s growth.
Bemis currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the sector include Apogee Enterprises, Inc. (APOG - Free Report) , Berry Plastics Group, Inc. (BERY - Free Report) and General Cable Corp. (BGC - Free Report) . All these three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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We issued an updated research report on Bemis Company, Inc. on Jul 4, 2016. Impact of operational inefficiencies in its Latin-American business remains the major drag on the company’s performance. Foreign currency headwinds, fluctuations in raw material prices and strong competition remain concerns.
Notably, Bemis’ global packaging segment witnessed year over year decline in operating profit in the last three quarters mainly due to Latin American business. The company’s Latin-American rigid business which includes products such as tubs for margarine, yogurt and ice cream, did not perform well operationally during first-quarter 2016.
Customer orders were softer in the quarter due to producers' aggressive pricing actions that were initially resisted by the retailers. This will affect Bemis’ earnings during the second quarter. The company also lowered the upper end of the full-year adjusted earnings per share guidance range to $2.68–$2.78 due to the effect of operational inefficiencies in its Latin-American business as well as the North-American healthcare business.
Bemis remains concerned that foreign currency headwinds would persist through the rest of the year. Given that the company has a significant footprint in Latin America, majority of the headwinds from the Brazil Real will occur in the first two quarters of 2016.
Operationally, Bemis’ U.S. business made great progress on margins during the first quarter -- a good portion of which was driven by the asset recapitalization program. However, the company does not expect future improvements at this exceptionally high pace.
Further, the major markets in which Bemis sells its products are highly competitive. Areas of competition include service, innovation, quality and price. This competition is significant in terms of both size and number of the competing firms. Moreover, fluctuations in raw material prices may hurt the company’s growth.
Bemis currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the sector include Apogee Enterprises, Inc. (APOG - Free Report) , Berry Plastics Group, Inc. (BERY - Free Report) and General Cable Corp. (BGC - Free Report) . All these three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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