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Silgan (SLGN) Strong on Segmental Performances, Acquisitions
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Silgan Holdings Inc. (SLGN - Free Report) is benefiting from the strong demand in beauty and fragrance markets, and recent acquisitions. Besides, manufacturing improvement efforts and capacity expansions have been driving growth for a while.
Record Earnings in Q2, Upbeat Outlook for 2022
Silgan’s second-quarter 2022 delivered adjusted earnings of $1.08 per share. The bottom line improved 27% year over year and bettered management’s guidance of 90 cents-$1.00 per share. Total revenues increased 14.5% year over year to $1,544 million on higher sales across its segments.
Management expects adjusted earnings per share for 2022 to be between $3.90 and $4.05, suggesting growth of 17% at the midpoint from the year-ago reported figure. The upbeat guidance reflects strong contribution from recent acquisitions, pass-through of raw material and other cost inflation, improved supply chain, labor availability and ongoing operating efficiencies across each segment.
Segments Poised Well for Growth
The Dispensing and Specialty Closures segment has been benefiting for a while from sustained strong volumes of the beauty and fragrance products. In 2022, the segment’s income for the Dispensing and Specialty Closures segment is expected to be higher than the year-ago reported figure owing to the inclusion of a full year from the buyouts of Gateway and Unicep, a less volatile resin market, more efficient operating performance and the ongoing momentum in the beauty and fragrance markets. The sports drinks business is also performing well and is expected to contribute to growth.
The Metal Container segment’s net sales are expected to increase in 2022 due to the pass-through of significant raw material inflation. Segment income is anticipated to be higher in 2022, courtesy of more efficient operating performance, cost improvements, the pass-through of other cost inflation to customers and the inclusion of a full year from the acquisition of Easytech, partially offset by lower unit volumes. The Custom Container segment’s income is expected to benefit from continued growth in pet food markets and manufacturing efficiencies.
Key Drivers in Place
Silgan is focused on deploying capital to expand its business and reduce operating costs while increasing shareholders’ returns. Silgan has been active on the acquisition front over the past few years, which will help it generate attractive cash returns in the near term. In February 2020, SLGN acquired Cobra Plastics, which expanded the product offering of its global closures franchise into various new markets and applications.
The buyout of Albea’s dispensing business in June 2020 strengthened Silgan’s position in the dispensing markets. In September 2021, SLGN closed the acquisitions of Unicep and Gateway Plastics to expand Dispensing and Specialty Closures. In October 2021, it acquired Easytech, a manufacturer and seller of easy-open and sanitary metal end used with metal containers, primarily for food applications in Europe.
Price Performance
Image Source: Zacks Investment Research
Silgan’s shares have gained 5.6% in the past six months against the industry’s decline of 28.8%.
Some other top-ranked stocks in the Industrial Products sector are RBC Bearings , W.W. Grainger (GWW - Free Report) and Greif (GEF - Free Report) . While ROLL and GWW currently flaunt a Zacks Rank #1, GEF carries a Zacks Rank of 2.
RBC Bearings has an expected earnings growth rate of 77% for fiscal 2023. The Zacks Consensus Estimate for current fiscal-year earnings has moved up 22% in the past 60 days.
RBC Bearings has a trailing four-quarter earnings surprise of 9.4%, on average. ROLL’s shares have increased 20% in the past six months.
Grainger has an estimated earnings growth rate of 41.5% for the current fiscal year. In the past 60 days, the Zacks Consensus Estimate for current fiscal-year earnings has been revised 7% upward.
Grainger pulled off a trailing four-quarter earnings surprise of 7.9%, on average. GEF’s shares have gained 10% in the past six months.
Greif has an estimated earnings growth rate of 43% for the current fiscal year. In the past 60 days, the Zacks Consensus Estimate for current fiscal-year earnings has gone up 5%.
Greif has a trailing four-quarter earnings surprise of 22.4%, on average. GEF’s shares have gained 11% over the past six months.
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Silgan (SLGN) Strong on Segmental Performances, Acquisitions
Silgan Holdings Inc. (SLGN - Free Report) is benefiting from the strong demand in beauty and fragrance markets, and recent acquisitions. Besides, manufacturing improvement efforts and capacity expansions have been driving growth for a while.
Record Earnings in Q2, Upbeat Outlook for 2022
Silgan’s second-quarter 2022 delivered adjusted earnings of $1.08 per share. The bottom line improved 27% year over year and bettered management’s guidance of 90 cents-$1.00 per share. Total revenues increased 14.5% year over year to $1,544 million on higher sales across its segments.
Management expects adjusted earnings per share for 2022 to be between $3.90 and $4.05, suggesting growth of 17% at the midpoint from the year-ago reported figure. The upbeat guidance reflects strong contribution from recent acquisitions, pass-through of raw material and other cost inflation, improved supply chain, labor availability and ongoing operating efficiencies across each segment.
Segments Poised Well for Growth
The Dispensing and Specialty Closures segment has been benefiting for a while from sustained strong volumes of the beauty and fragrance products. In 2022, the segment’s income for the Dispensing and Specialty Closures segment is expected to be higher than the year-ago reported figure owing to the inclusion of a full year from the buyouts of Gateway and Unicep, a less volatile resin market, more efficient operating performance and the ongoing momentum in the beauty and fragrance markets. The sports drinks business is also performing well and is expected to contribute to growth.
The Metal Container segment’s net sales are expected to increase in 2022 due to the pass-through of significant raw material inflation. Segment income is anticipated to be higher in 2022, courtesy of more efficient operating performance, cost improvements, the pass-through of other cost inflation to customers and the inclusion of a full year from the acquisition of Easytech, partially offset by lower unit volumes. The Custom Container segment’s income is expected to benefit from continued growth in pet food markets and manufacturing efficiencies.
Key Drivers in Place
Silgan is focused on deploying capital to expand its business and reduce operating costs while increasing shareholders’ returns. Silgan has been active on the acquisition front over the past few years, which will help it generate attractive cash returns in the near term. In February 2020, SLGN acquired Cobra Plastics, which expanded the product offering of its global closures franchise into various new markets and applications.
The buyout of Albea’s dispensing business in June 2020 strengthened Silgan’s position in the dispensing markets. In September 2021, SLGN closed the acquisitions of Unicep and Gateway Plastics to expand Dispensing and Specialty Closures. In October 2021, it acquired Easytech, a manufacturer and seller of easy-open and sanitary metal end used with metal containers, primarily for food applications in Europe.
Price Performance
Image Source: Zacks Investment Research
Silgan’s shares have gained 5.6% in the past six months against the industry’s decline of 28.8%.
Zacks Rank & Other Stocks to Consider
Silgan currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the Industrial Products sector are RBC Bearings , W.W. Grainger (GWW - Free Report) and Greif (GEF - Free Report) . While ROLL and GWW currently flaunt a Zacks Rank #1, GEF carries a Zacks Rank of 2.
RBC Bearings has an expected earnings growth rate of 77% for fiscal 2023. The Zacks Consensus Estimate for current fiscal-year earnings has moved up 22% in the past 60 days.
RBC Bearings has a trailing four-quarter earnings surprise of 9.4%, on average. ROLL’s shares have increased 20% in the past six months.
Grainger has an estimated earnings growth rate of 41.5% for the current fiscal year. In the past 60 days, the Zacks Consensus Estimate for current fiscal-year earnings has been revised 7% upward.
Grainger pulled off a trailing four-quarter earnings surprise of 7.9%, on average. GEF’s shares have gained 10% in the past six months.
Greif has an estimated earnings growth rate of 43% for the current fiscal year. In the past 60 days, the Zacks Consensus Estimate for current fiscal-year earnings has gone up 5%.
Greif has a trailing four-quarter earnings surprise of 22.4%, on average. GEF’s shares have gained 11% over the past six months.