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Ball Corporation (BALL - Free Report) supplies aluminum packaging products for the beverage, personal care, and household industries globally. The company manufactures and sells aluminum containers of carbonated soft drinks, beer, energy drinks, and related beverages. BALL also develops sensors and instruments, radio frequency systems, and other technologies for the civil and national security aerospace markets to governmental and commercial customers. Ball Corp. was founded in 1880 and is based in Westminster, CO.
The Zacks Rundown
BALL is part of the Zacks Containers – Metal and Glass industry group, which currently ranks in the bottom 1% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. This industry has widely underperformed the market this year with a -34% return year-to-date:
Image Source: Zacks Investment Research
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. BALL is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Despite this year’s price decline, BALL is still overvalued relative to its industry group, irrespective of the metric used:
Image Source: Zacks Investment Research
Weak Foundation: Falling Short on Earnings and Deteriorating Forecasts
Earnings misses have been a sore spot for BALL during the past year. The packaging company has fallen short of estimates in three of the past four quarters. BALL most recently reported Q3 EPS last week of $0.75, missing the $0.76 consensus estimate by -1.32%.
BALL has posted an average earnings miss of -2.42% over the past four quarters. This is the type of negative trend that the bears like to see. Consistently missing earnings estimates is a recipe for stock price underperformance, and BALL is no exception.
Analysts have been revising earnings estimates downward as of late. For the current quarter, estimates have been slashed -11.49% over the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $0.77, translating to a -20.62% earnings regression relative to the same quarter last year.
Image Source: Zacks Investment Research
Technical Outlook
BALL stock has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 45% this year. The stock continues to trade below both averages, while the 50-day moving average has acted as steady resistance throughout the down move:
Image Source: StockCharts
BALL has continued to make a series of lower lows during the fourth quarter, even as many stocks have shown strength.
Final Thoughts
The recent earnings misses in addition to deteriorating estimates are both huge red flags and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
BALL’s characteristics have resulted in a worst-possible Zacks Growth Style Score of ‘F’, indicating further downside is likely. The fact that BALL is included in a bottom-performing industry group simply adds to the growing list of concerns. Investors will want to steer clear of BALL until the situation shows major signs of improvement, or possibly include it as part of a hedge or short strategy.
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Bear of the Day: Ball Corp. (BALL)
Ball Corporation (BALL - Free Report) supplies aluminum packaging products for the beverage, personal care, and household industries globally. The company manufactures and sells aluminum containers of carbonated soft drinks, beer, energy drinks, and related beverages. BALL also develops sensors and instruments, radio frequency systems, and other technologies for the civil and national security aerospace markets to governmental and commercial customers. Ball Corp. was founded in 1880 and is based in Westminster, CO.
The Zacks Rundown
BALL is part of the Zacks Containers – Metal and Glass industry group, which currently ranks in the bottom 1% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. This industry has widely underperformed the market this year with a -34% return year-to-date:
Image Source: Zacks Investment Research
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. BALL is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Despite this year’s price decline, BALL is still overvalued relative to its industry group, irrespective of the metric used:
Image Source: Zacks Investment Research
Weak Foundation: Falling Short on Earnings and Deteriorating Forecasts
Earnings misses have been a sore spot for BALL during the past year. The packaging company has fallen short of estimates in three of the past four quarters. BALL most recently reported Q3 EPS last week of $0.75, missing the $0.76 consensus estimate by -1.32%.
BALL has posted an average earnings miss of -2.42% over the past four quarters. This is the type of negative trend that the bears like to see. Consistently missing earnings estimates is a recipe for stock price underperformance, and BALL is no exception.
Analysts have been revising earnings estimates downward as of late. For the current quarter, estimates have been slashed -11.49% over the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $0.77, translating to a -20.62% earnings regression relative to the same quarter last year.
Image Source: Zacks Investment Research
Technical Outlook
BALL stock has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 45% this year. The stock continues to trade below both averages, while the 50-day moving average has acted as steady resistance throughout the down move:
Image Source: StockCharts
BALL has continued to make a series of lower lows during the fourth quarter, even as many stocks have shown strength.
Final Thoughts
The recent earnings misses in addition to deteriorating estimates are both huge red flags and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
BALL’s characteristics have resulted in a worst-possible Zacks Growth Style Score of ‘F’, indicating further downside is likely. The fact that BALL is included in a bottom-performing industry group simply adds to the growing list of concerns. Investors will want to steer clear of BALL until the situation shows major signs of improvement, or possibly include it as part of a hedge or short strategy.