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Ball Corp Buys Tubex Facility, Expands in Aluminum Packaging

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Ball Corporation (BLL - Free Report) has completed the acquisition of Brazilian aluminum aerosol packaging business, Tubex Industria E Comercio de Embalagens Ltda. The company acquired the Tubex manufacturing plant in Itupeva, based-in Sao Paolo. The plant has eight extruded aluminum aerosol can lines that produce personal care packaging for global and local customers in Brazil.

This March, the company entered into an agreement to acquire this business for $80 million. With the increasing preference for sustainable aluminum packaging options among global customers, this strategic investment allows the company to extend its geographic reach, while serving the market as one of the leading aluminum aerosol suppliers in Brazil.

Following the buyout, the plant has now become part of Ball Corporation’s aluminum aerosol packaging division. Notably, the buyout supports the company’s global aluminum aerosol and slug business in the Americas, Europe and India.

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 a 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.

Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. Further, it has taken actions to improve operational performance in the aluminum aerosol business, while introducing additional products to expand its aerospace infrastructure and testing capabilities.

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.

Moreover, the company’s top-line performance is likely to gain from elevated demand in consumer-oriented end markets, such as food and beverages, household and healthcare, amid the COVID-19 pandemic. Also, higher at-home consumption is anticipated to drive growth.

Price Performance

The stock has gained 24.3% year to date, outperforming the industry’s growth of 18.9%.

 

Zacks Rank & Other Stocks to Consider

Ball Corporation currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. (SLGN - Free Report) , IIVI Incorporated (IIVI - Free Report) and SiteOne Landscape Supply, Inc. (SITE - Free Report) . While Silgan and IIVI sport a Zacks Rank #1 (Strong Buy), SiteOne carries a Zacks Rank of 2, 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 appreciated 28.4% over the past year.

IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have gained 18.1% in a year’s time.

SiteOne Landscape has an expected earnings growth rate of 15.4% for the current year. The stock has surged 61.6% over the past year.

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