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.
Berry Global (BERY) Displays Solid Prospects, Headwinds Persist
Read MoreHide Full Article
On Jan 18, we issued an updated research report on Berry Global Group, Inc. (BERY - Free Report) .
In the past six months, this Zacks Rank #3 (Hold) stock has returned 12.1% compared with the industry’s growth of 19.8%.
Present Scenario
Berry Global is poised to benefit from strength across its grocery and consumer-centric end markets as well as recovery in the food service space. Also, strength across the company’s healthcare end market and signs of improvement in automotive and industrial end markets are likely to drive its performance in the quarters ahead. For fiscal 2021 (ending September 2021), the company anticipates organic sales to grow 2% on a year-over-year basis.
Also, Berry Global’s acquisition of RPC Group (July 2019) has been strengthening its growth opportunities in the plastic and recycled packaging industry. Notably, the company anticipates this buyout to generate annual cost synergies of $150 million, with $50 million of it expected to be realized in fiscal 2021. It’s worth mentioning here that in fiscal 2020 (ended September 2020), buyouts contributed 28.6% to the company’s net sales.
Moreover, the company’s ability to generate healthy cash flows is likely to support its capital-allocation strategies. For instance, it anticipates cash flow from operations of $1,525-$1,625 million and free cash flow of $875-$975 million for fiscal 2021.
However, Berry Global has been witnessing rise in costs and expenses over time. Notably, in fiscal 2020, the company's cost of goods sold soared 28.1%, on a year-over-year basis despite its cost-reduction initiatives. Also, its selling, general and administrative expenses jumped 45.8%.
In addition, the company’s high-debt profile poses a concern. For instance, in the last five fiscal years (2016-2020), its long-term debt rose 12.2% (CAGR). Notably, the metric remained high at $10,162 million exiting fiscal 2020. Any further increase in debt levels can raise the company’s financial obligations.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Graphic Packaging delivered a positive earnings surprise of 19.76%, on average, in the trailing four quarters.
Sealed Air delivered a positive earnings surprise of 23.07%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Berry Global (BERY) Displays Solid Prospects, Headwinds Persist
On Jan 18, we issued an updated research report on Berry Global Group, Inc. (BERY - Free Report) .
In the past six months, this Zacks Rank #3 (Hold) stock has returned 12.1% compared with the industry’s growth of 19.8%.
Present Scenario
Berry Global is poised to benefit from strength across its grocery and consumer-centric end markets as well as recovery in the food service space. Also, strength across the company’s healthcare end market and signs of improvement in automotive and industrial end markets are likely to drive its performance in the quarters ahead. For fiscal 2021 (ending September 2021), the company anticipates organic sales to grow 2% on a year-over-year basis.
Also, Berry Global’s acquisition of RPC Group (July 2019) has been strengthening its growth opportunities in the plastic and recycled packaging industry. Notably, the company anticipates this buyout to generate annual cost synergies of $150 million, with $50 million of it expected to be realized in fiscal 2021. It’s worth mentioning here that in fiscal 2020 (ended September 2020), buyouts contributed 28.6% to the company’s net sales.
Moreover, the company’s ability to generate healthy cash flows is likely to support its capital-allocation strategies. For instance, it anticipates cash flow from operations of $1,525-$1,625 million and free cash flow of $875-$975 million for fiscal 2021.
However, Berry Global has been witnessing rise in costs and expenses over time. Notably, in fiscal 2020, the company's cost of goods sold soared 28.1%, on a year-over-year basis despite its cost-reduction initiatives. Also, its selling, general and administrative expenses jumped 45.8%.
In addition, the company’s high-debt profile poses a concern. For instance, in the last five fiscal years (2016-2020), its long-term debt rose 12.2% (CAGR). Notably, the metric remained high at $10,162 million exiting fiscal 2020. Any further increase in debt levels can raise the company’s financial obligations.
Key Picks
Some better-ranked stocks from the same space are AptarGroup, Inc. (ATR - Free Report) , Graphic Packaging Holding Company (GPK - Free Report) and Sealed Air Corporation (SEE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Graphic Packaging delivered a positive earnings surprise of 19.76%, on average, in the trailing four quarters.
Sealed Air delivered a positive earnings surprise of 23.07%, on average, in the trailing four quarters.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>