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Ball Corp (BLL) to Build Can Plant in Nevada to Meet Demand
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Ball Corporation recently announced that it intends to build a new multi-line aluminum beverage-can packaging plant in North Las Vegas, NV, in an effort to boost its capacity to meet customers’ heightening demand for beverage cans. This plant is scheduled to commence production in the end of 2022. The company plans to invest roughly $290 million in this facility over several years. The plant will supply a variety of innovative can sizes to diverse beverage customers.
Given its proximity to customer can-filling investments, rising beverage can packaging demand in the region, proper infrastructure and regional labor base, North Las Vegas is an appropriate choice. Once it gets fully operational, the new facility will likely add 180 jobs in the state.
The can industry has been witnessing a rising demand for the past few years, as customers now prefer cans over plastic packaging owing to environmental concerns. Changing lifestyle choices, population growth and increasing disposable income have led to this shift. An estimated 75% of new beverage product launches are now in cans. These aluminum cans, bottles and cups are infinitely recyclable and economically valuable beverage packaging option, with an 82% recycling rate in the U.K. and 76% across Europe. On top of this, the COVID-19 pandemic provided a boost to the beverage can industry, as customers are opting to buy multiple packs of beverages and packaged products that can be consumed on-the-go. The global beverage-can industry is expected to grow by approximately 100 billion units by 2025. Of this, the company sees an opportunity to add as much as 45 billion units.
To capitalize on this demand trend, Ball Corp has been investing significantly in projects across North America, South America and EMEA, which are expected to add at least 25 billion units of contracted beverage-can capacity by the end of 2023 (off a 2019 base of 100 billion units). The company has been witnessing stellar growth in its top and bottom lines for the past few quarters thanks to the solid global beverage-can demand. The company’s constant focus on rolling out new products and efforts to cut down costs will continue to aid its performance.
The investments also align with Ball Corp’s “Drive for 10 vision”, which comprises five strategic levers that are key to growing its business and driving long-term growth. A key lever among these is to maximize the value of the existing businesses by improving efficiencies in its facilities and expanding production across the company’s global plant network to meet the current demand.
The company maintains its expectation to deliver long-term diluted earnings per share growth of at least 10-15% and achieve EVA (economic value added) dollars growth of 4-8% per year in 2021 and beyond.
Price Performance
The stock has gained 11.4% over the past six months, outperforming the industry’s growth of 8.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Ball Corp currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Ball Corp (BLL) to Build Can Plant in Nevada to Meet Demand
Ball Corporation recently announced that it intends to build a new multi-line aluminum beverage-can packaging plant in North Las Vegas, NV, in an effort to boost its capacity to meet customers’ heightening demand for beverage cans. This plant is scheduled to commence production in the end of 2022. The company plans to invest roughly $290 million in this facility over several years. The plant will supply a variety of innovative can sizes to diverse beverage customers.
Given its proximity to customer can-filling investments, rising beverage can packaging demand in the region, proper infrastructure and regional labor base, North Las Vegas is an appropriate choice. Once it gets fully operational, the new facility will likely add 180 jobs in the state.
The can industry has been witnessing a rising demand for the past few years, as customers now prefer cans over plastic packaging owing to environmental concerns. Changing lifestyle choices, population growth and increasing disposable income have led to this shift. An estimated 75% of new beverage product launches are now in cans. These aluminum cans, bottles and cups are infinitely recyclable and economically valuable beverage packaging option, with an 82% recycling rate in the U.K. and 76% across Europe. On top of this, the COVID-19 pandemic provided a boost to the beverage can industry, as customers are opting to buy multiple packs of beverages and packaged products that can be consumed on-the-go. The global beverage-can industry is expected to grow by approximately 100 billion units by 2025. Of this, the company sees an opportunity to add as much as 45 billion units.
To capitalize on this demand trend, Ball Corp has been investing significantly in projects across North America, South America and EMEA, which are expected to add at least 25 billion units of contracted beverage-can capacity by the end of 2023 (off a 2019 base of 100 billion units). The company has been witnessing stellar growth in its top and bottom lines for the past few quarters thanks to the solid global beverage-can demand. The company’s constant focus on rolling out new products and efforts to cut down costs will continue to aid its performance.
The investments also align with Ball Corp’s “Drive for 10 vision”, which comprises five strategic levers that are key to growing its business and driving long-term growth. A key lever among these is to maximize the value of the existing businesses by improving efficiencies in its facilities and expanding production across the company’s global plant network to meet the current demand.
The company maintains its expectation to deliver long-term diluted earnings per share growth of at least 10-15% and achieve EVA (economic value added) dollars growth of 4-8% per year in 2021 and beyond.
Price Performance
The stock has gained 11.4% over the past six months, outperforming the industry’s growth of 8.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Ball Corp currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE - Free Report) , Alcoa Corporation (AA - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) , each carrying a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.
Alcoa has an estimated earnings growth rate of 573.2% for 2021. The company’s shares have rallied 108%, so far this year.
Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22%, year to date.