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Reasons to Hold Crown Holdings (CCK) in Your Portfolio
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Crown Holdings, Inc. (CCK - Free Report) is well-poised to benefit from its focus on growing its global beverage can operations to meet the customer demand in the alcoholic and non-alcoholic drink categories. The company’s offering of multiple product sizes drives brand differentiation and provides it with a competitive edge. Disciplined pricing and cost-control actions are expected to aid its margins despite the ongoing inflationary pressures.
Positive Earnings Surprise History: Crown Holdings, a Zacks Rank #3 (Hold) company, has an average trailing four-quarter earnings surprise of 2.78%.
Return on Equity: Crown Holdings’ trailing 12-month return on equity (ROE) of 31.4% emphasizes its growth potential. The company’s ROE is higher than the industry’s ROE of 25.4%, highlighting its efficiency in utilizing shareholders’ funds.
Positive Estimate Revision Activity: The company’s earnings estimate for the current year has moved up 1% over the past 60 days.
Price Performance
Crown Holdings’ shares have declined 10.7% in the past year, faring better than the industry's fall of 14.5%.
Image Source: Zacks Investment Research
Beverage Can Demand Looks Solid
In the past few years, beverage cans demand has been growing on account of it being the world’s most sustainable and recycled beverage packaging. An estimated 75% of new beverage product launches are now in cans. Demand is expected to continue to outstrip supply in most global markets for the foreseeable future. Crown Holdings is thus focused on growing its global beverage can business. In 2022, approximately 66% of its net sales were derived from its global beverage can operations.
Capacity Expansion in Place
CCK continues to implement several expansion projects, including the construction of new plants and the addition of production lines to existing facilities that will help meet the escalating can demand. Approximately 25 billion units of beverage cans capacity are planned to be added through the end of 2023 (from 2019 levels).
In the United States, the first line of a new plant in Martinsville, Virginia began shipping to customers in November 2022 and the second line commenced commercial production in the first quarter of 2023. In Mesquite, NV the company expects to begin commercial production from line one in July 2023 and line two in October 2023. Across Europe, Crown Holdings is adding much-needed capacity to its system with high-speed production lines being added to facilities in Parma, Italy and Agoncillo, Spain with startups expected in March and May, respectively.
The previously announced relocation of beverage can operations to a new site in Peterborough, United Kingdom is underway with the first line expected to commence production late in the second quarter of 2023 and the second line in August 2023. In North American Food, the capacity expansion has been mainly focused on expanding pet food can capacity with the third two-piece steel production line to the Owatonna, Minnesota plant completed in November. Additionally, the company is installing a pet food can line to the Dubuque, Iowa plant with operations expected to commence in the third quarter.
Pricing, Cost Control to Aid Margins
Elevated input costs and interest expenses are expected to hurt the margin performance till the situation stabilizes. Nevertheless, the company company’s focus on disciplined pricing and cost control will help negate these headwinds. The company's primary capital allocation focus continues to be to reduce leverage while still investing in its business.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Hubbell Incorporated (HUBB - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) and AptarGroup, Inc. (ATR). HUBB and MTW sport a Zacks Rank #1 (Strong Buy) at present, and ATR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell has an average trailing four-quarter earnings surprise of 21%. The Zacks Consensus Estimate for HUBB’s fiscal 2023 earnings is pegged at $13.81 per share. The consensus estimate for 2023 earnings has moved 22.5% north in the past 60 days. Its shares have gained 66.9% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares have gained 49.2% in the last year.
The Zacks Consensus Estimate for AptarGroup’s 2023 earnings per share is pegged at $4.15, up 7.5% in the past 60 days. It has a trailing four-quarter average earnings surprise of 6.4%. ATR gained 12.6% in the last year.
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Reasons to Hold Crown Holdings (CCK) in Your Portfolio
Crown Holdings, Inc. (CCK - Free Report) is well-poised to benefit from its focus on growing its global beverage can operations to meet the customer demand in the alcoholic and non-alcoholic drink categories. The company’s offering of multiple product sizes drives brand differentiation and provides it with a competitive edge. Disciplined pricing and cost-control actions are expected to aid its margins despite the ongoing inflationary pressures.
Positive Earnings Surprise History: Crown Holdings, a Zacks Rank #3 (Hold) company, has an average trailing four-quarter earnings surprise of 2.78%.
Return on Equity: Crown Holdings’ trailing 12-month return on equity (ROE) of 31.4% emphasizes its growth potential. The company’s ROE is higher than the industry’s ROE of 25.4%, highlighting its efficiency in utilizing shareholders’ funds.
Positive Estimate Revision Activity: The company’s earnings estimate for the current year has moved up 1% over the past 60 days.
Price Performance
Crown Holdings’ shares have declined 10.7% in the past year, faring better than the industry's fall of 14.5%.
Image Source: Zacks Investment Research
Beverage Can Demand Looks Solid
In the past few years, beverage cans demand has been growing on account of it being the world’s most sustainable and recycled beverage packaging. An estimated 75% of new beverage product launches are now in cans. Demand is expected to continue to outstrip supply in most global markets for the foreseeable future. Crown Holdings is thus focused on growing its global beverage can business. In 2022, approximately 66% of its net sales were derived from its global beverage can operations.
Capacity Expansion in Place
CCK continues to implement several expansion projects, including the construction of new plants and the addition of production lines to existing facilities that will help meet the escalating can demand. Approximately 25 billion units of beverage cans capacity are planned to be added through the end of 2023 (from 2019 levels).
In the United States, the first line of a new plant in Martinsville, Virginia began shipping to customers in November 2022 and the second line commenced commercial production in the first quarter of 2023. In Mesquite, NV the company expects to begin commercial production from line one in July 2023 and line two in October 2023. Across Europe, Crown Holdings is adding much-needed capacity to its system with high-speed production lines being added to facilities in Parma, Italy and Agoncillo, Spain with startups expected in March and May, respectively.
The previously announced relocation of beverage can operations to a new site in Peterborough, United Kingdom is underway with the first line expected to commence production late in the second quarter of 2023 and the second line in August 2023. In North American Food, the capacity expansion has been mainly focused on expanding pet food can capacity with the third two-piece steel production line to the Owatonna, Minnesota plant completed in November. Additionally, the company is installing a pet food can line to the Dubuque, Iowa plant with operations expected to commence in the third quarter.
Pricing, Cost Control to Aid Margins
Elevated input costs and interest expenses are expected to hurt the margin performance till the situation stabilizes. Nevertheless, the company company’s focus on disciplined pricing and cost control will help negate these headwinds. The company's primary capital allocation focus continues to be to reduce leverage while still investing in its business.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Hubbell Incorporated (HUBB - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) and AptarGroup, Inc. (ATR). HUBB and MTW sport a Zacks Rank #1 (Strong Buy) at present, and ATR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell has an average trailing four-quarter earnings surprise of 21%. The Zacks Consensus Estimate for HUBB’s fiscal 2023 earnings is pegged at $13.81 per share. The consensus estimate for 2023 earnings has moved 22.5% north in the past 60 days. Its shares have gained 66.9% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares have gained 49.2% in the last year.
The Zacks Consensus Estimate for AptarGroup’s 2023 earnings per share is pegged at $4.15, up 7.5% in the past 60 days. It has a trailing four-quarter average earnings surprise of 6.4%. ATR gained 12.6% in the last year.