We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons to Hold Ball Corp (BLL) Stock in Your Portfolio Now
Read MoreHide Full Article
Ball Corporation is poised well to gain on the surging global beverage can demand as customers are preferring cans over glass and plastic. Strong backlog levels in the Aerospace segment, investment in acquisitions, growing production capacity, and introduction of new products will also contribute to growth.
The stock has long-term expected earnings per share growth rate of 5.0%.
At present, Ball Corp carries a Zacks Rank #3 (Hold). It has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities for investors. You can see the complete list of today's Zacks #1 Rank stocks here.
In the past three months, the stock has gained 20.9%, compared with the industry’s rally of 22.4%.
Let’s delve deeper and analyze the factors that substantiate the company’s Zacks Rank #3.
Better-Than-Expected Q2 Results
Ball Corp 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.
Positive Earnings Surprise History
The company has a trailing four-quarter earnings surprise of 4%, on average.
Return on Assets
Ball Corp currently has a Return on Assets (ROA) of 5.4%, while the industry recorded ROA of 5.1%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Solid Demand for Beverage Cans to Fuel Growth
Globally customers are preferring cans over glass and plastic given its inherent sustainability attributes. Thus, the company is significantly investing in aluminum packaging production to capitalize on rising demand. Ball Corp’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.
In March 2020, Ball Corp agreed to acquire Tubex Industria E Comercio de Embalagens Ltda, an aluminum aerosol packaging business. The transaction is expected to close in third-quarter 2020 and will broaden the geographic reach of the company’s aluminum aerosol packaging business, serving the growing Brazilian personal care market.
The company maintains its expectation to deliver long-term diluted earnings per share growth of at least 10% to 15% beyond 2020 and achieve EVA (economic value added) dollars growth of 4% to 8% per year.
Pandemic-Driven Demand to Fuel Top Line
Ball Corp 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 sustain the company’s top-line performance.
Aerospace Segment Shows Resilience
The Aerospace segment’s contracted backlog remained strong at $2.1 billion as of second-quarter 2020 end. Contracts already won but not yet booked into current contracted backlog, reflected a sequential increase of 10% to $5.3 billion. The segment continues to win and provide mission-critical programs and technologies to U.S. government, defense, intelligence, reconnaissance and surveillance customers. Multiple projects to expand manufacturing capacity, test capabilities and engineering and support workspace are on track.
However, there are a few factors that are likely to hinder growth in the near term.
Demand for beverage cans has outstripped current supply capacity. Due to these supply constraints, Ball Corp expects to import cans to meet demand until its new plants ramp up. It will lead to higher freight costs. Incremental costs related to the COVID-19 pandemic may dampen near-term price/mix. The company might incur higher-than-expected start-up costs due to the ongoing capacity expansion efforts to meet growing demand for cans. These factors will impact margins in the near term.
Stocks to Consider
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) . While Silgan and IIVI Incorporated sport a Zacks Rank #1, SiteOne Landscape carries a Zacks Rank #2 at present.
Silgan has a projected earnings growth rate of 28.7% for the current year. The company’s shares have gained 16% in the past three months.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 16% in three months’ time.
SiteOne Landscape Supply has an expected earnings growth rate of 6.2% for 2020. The stock has surged 39% over the past three months.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Reasons to Hold Ball Corp (BLL) Stock in Your Portfolio Now
Ball Corporation is poised well to gain on the surging global beverage can demand as customers are preferring cans over glass and plastic. Strong backlog levels in the Aerospace segment, investment in acquisitions, growing production capacity, and introduction of new products will also contribute to growth.
The stock has long-term expected earnings per share growth rate of 5.0%.
At present, Ball Corp carries a Zacks Rank #3 (Hold). It has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities for investors. You can see the complete list of today's Zacks #1 Rank stocks here.
In the past three months, the stock has gained 20.9%, compared with the industry’s rally of 22.4%.
Let’s delve deeper and analyze the factors that substantiate the company’s Zacks Rank #3.
Better-Than-Expected Q2 Results
Ball Corp 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.
Positive Earnings Surprise History
The company has a trailing four-quarter earnings surprise of 4%, on average.
Return on Assets
Ball Corp currently has a Return on Assets (ROA) of 5.4%, while the industry recorded ROA of 5.1%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Solid Demand for Beverage Cans to Fuel Growth
Globally customers are preferring cans over glass and plastic given its inherent sustainability attributes. Thus, the company is significantly investing in aluminum packaging production to capitalize on rising demand. Ball Corp’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.
In March 2020, Ball Corp agreed to acquire Tubex Industria E Comercio de Embalagens Ltda, an aluminum aerosol packaging business. The transaction is expected to close in third-quarter 2020 and will broaden the geographic reach of the company’s aluminum aerosol packaging business, serving the growing Brazilian personal care market.
The company maintains its expectation to deliver long-term diluted earnings per share growth of at least 10% to 15% beyond 2020 and achieve EVA (economic value added) dollars growth of 4% to 8% per year.
Pandemic-Driven Demand to Fuel Top Line
Ball Corp 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 sustain the company’s top-line performance.
Aerospace Segment Shows Resilience
The Aerospace segment’s contracted backlog remained strong at $2.1 billion as of second-quarter 2020 end. Contracts already won but not yet booked into current contracted backlog, reflected a sequential increase of 10% to $5.3 billion. The segment continues to win and provide mission-critical programs and technologies to U.S. government, defense, intelligence, reconnaissance and surveillance customers. Multiple projects to expand manufacturing capacity, test capabilities and engineering and support workspace are on track.
However, there are a few factors that are likely to hinder growth in the near term.
Demand for beverage cans has outstripped current supply capacity. Due to these supply constraints, Ball Corp expects to import cans to meet demand until its new plants ramp up. It will lead to higher freight costs. Incremental costs related to the COVID-19 pandemic may dampen near-term price/mix. The company might incur higher-than-expected start-up costs due to the ongoing capacity expansion efforts to meet growing demand for cans. These factors will impact margins in the near term.
Stocks to Consider
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) . While Silgan and IIVI Incorporated sport a Zacks Rank #1, SiteOne Landscape carries a Zacks Rank #2 at present.
Silgan has a projected earnings growth rate of 28.7% for the current year. The company’s shares have gained 16% in the past three months.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 16% in three months’ time.
SiteOne Landscape Supply has an expected earnings growth rate of 6.2% for 2020. The stock has surged 39% over the past three months.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>