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Ball Corp to Invest in New Beverage Can Plant in North America

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Ball Corporation (BLL - Free Report) announced its plans to build a new U.S. aluminum beverage packaging plant in Pittston, PA. This multi-line beverage can plant is slated to begin production in mid-2021 and will add approximately 230 manufacturing jobs.

The latest investment supports Ball Corporation’s commitment to catering to escalating demand for infinitely recyclable aluminum containers used in spiked seltzer, sparkling water, beer and carbonated beverage categories. Pittston will join the company’s other North American beverage can manufacturing facilities, including a new plant in Glendale, AZ, which is currently under construction and scheduled to start up in first-quarter 2021. These strategic investments will enable Ball Corporation to fulfill customers’ needs for sustainable beverage packaging.

Ball Corporation intends to invest more than $300 million in its Pittston plant over several years. The plant will supply different can sizes to customers. Pittston plant’s existing infrastructure, regional labor base, proximity to main distribution routes as well as growth opportunities in Pennsylvania bode well for Ball Corporation.

In the current year, 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 from new production lines in Georgia and Texas. These product lines will be operational in the second half and are expected to aid growth in the near term.

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 aluminum cans, bottles and cups are infinitely recyclable and economically valuable. The company’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 other products to expand its aerospace infrastructure and testing capabilities.

The company 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 beverage can demand.

Price Performance

The stock has gained 4.7% over the past year, compared to the industry’s growth of 10.7%.

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 (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 (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 appreciated 32.9% 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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