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Berry Global (BERY) Gains 2.3% in 6 Months: Will the Trend Last?
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Berry Global Group, Inc. (BERY - Free Report) appears in good shape, with its shares having rallied 2.3% over the past six months against the industry’s 5.7% decline.
Catalysts Behind the Price Surge
Berry Global is benefiting from a strong portfolio of products, the bulk of which includes consumer non-discretionary products. Strength in its food service market is aiding BERY’s Consumer Packaging North America segment. Accretive pricing and an improved product mix to higher-value products are driving the Consumer Packaging International segment. In the near term, the robust segmental performance is poised to support the company’s top line.
BERY’s investments in the latest equipment technologies, advantaged film development and design for circularity are likely to enhance its competency in the quarters ahead. Berry Global started expanding one of its stretch film manufacturing facilities in Lewisburg, TN, in April 2023. The facility is expected to be completed by early 2024. The 25,000-square-foot expansion will support the growing demand for Berry’s highest-performing, sustainable stretch films by creating space for three new cast lines and upgrading the capacity of the facilities existing post-industrial resin reprocessing system.
Image Source: Zacks Investment Research
The company utilizes its cash flow to reward its shareholders through dividend payouts and share repurchase programs. In February 2022, the company announced a share repurchase program worth $1 billion. In fiscal 2022 (ended Sep 30, 2022), BERY announced an additional $700 million allocation to its existing share repurchase program.
Berry Global bought back shares worth $709 million in fiscal 2022 and $333 million in the first six months of fiscal 2023 (ended Mar 31, 2023). The company also paid out $65 million in dividends in the first six months of fiscal 2023. BERY intends to buy back shares worth at least $600 million in fiscal 2023 (ending September 2023).
Will The Momentum Continue?
Improving supply-chain conditions are expected to drive Berry Global's performance in 2023. A reduction in raw material costs due to the deceleration in inflation is expected to support the bottom line. The company’s focus on improving operational productivity and partnerships across the value chain are likely to continue improving margins and the financial performance in the quarters ahead.
Zacks Rank & Stocks to Consider
BERY currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 6%. The stock has improved 8.2% in the past six months.
Alamo Group Inc. (ALG - Free Report) currently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 19.4% in the past six months.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1 at present. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 4.2% in the past six months.
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Berry Global (BERY) Gains 2.3% in 6 Months: Will the Trend Last?
Berry Global Group, Inc. (BERY - Free Report) appears in good shape, with its shares having rallied 2.3% over the past six months against the industry’s 5.7% decline.
Catalysts Behind the Price Surge
Berry Global is benefiting from a strong portfolio of products, the bulk of which includes consumer non-discretionary products. Strength in its food service market is aiding BERY’s Consumer Packaging North America segment. Accretive pricing and an improved product mix to higher-value products are driving the Consumer Packaging International segment. In the near term, the robust segmental performance is poised to support the company’s top line.
BERY’s investments in the latest equipment technologies, advantaged film development and design for circularity are likely to enhance its competency in the quarters ahead. Berry Global started expanding one of its stretch film manufacturing facilities in Lewisburg, TN, in April 2023. The facility is expected to be completed by early 2024. The 25,000-square-foot expansion will support the growing demand for Berry’s highest-performing, sustainable stretch films by creating space for three new cast lines and upgrading the capacity of the facilities existing post-industrial resin reprocessing system.
Image Source: Zacks Investment Research
The company utilizes its cash flow to reward its shareholders through dividend payouts and share repurchase programs. In February 2022, the company announced a share repurchase program worth $1 billion. In fiscal 2022 (ended Sep 30, 2022), BERY announced an additional $700 million allocation to its existing share repurchase program.
Berry Global bought back shares worth $709 million in fiscal 2022 and $333 million in the first six months of fiscal 2023 (ended Mar 31, 2023). The company also paid out $65 million in dividends in the first six months of fiscal 2023. BERY intends to buy back shares worth at least $600 million in fiscal 2023 (ending September 2023).
Will The Momentum Continue?
Improving supply-chain conditions are expected to drive Berry Global's performance in 2023. A reduction in raw material costs due to the deceleration in inflation is expected to support the bottom line. The company’s focus on improving operational productivity and partnerships across the value chain are likely to continue improving margins and the financial performance in the quarters ahead.
Zacks Rank & Stocks to Consider
BERY currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 6%. The stock has improved 8.2% in the past six months.
Alamo Group Inc. (ALG - Free Report) currently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 19.4% in the past six months.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1 at present. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 4.2% in the past six months.