On Jun 6, Zacks Investment Research upgraded Owens-Illinois, Inc. (OI Quick QuoteOI - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Owens-Illinois reported first-quarter 2016 adjusted earnings per share of 48 cents, up 33% year over year on a constant currency basis and outpaced management’s guidance of 37 to 42 cents, thanks to strong business performance and favorable currency translation.

During the quarter, manufacturing efficiencies improved at two-thirds of Owens-Illinois’s global facilities compared to the prior-year quarter. The company made solid progress on many elements of its strategic plan and will continue to focus on its execution. In the reported quarter, global shipments were up 14%, driven by the contribution of the acquired business. Volumes increased in all major product categories. Excluding the acquired business, global volumes were essentially at par with the prior-year quarter, still in line with the company’s overall view for a volume uptick for the full year.

Owens-Illinois hiked its adjusted earnings per share guidance for 2016 to the range of $2.25 to $2.35, from the prior $2.10 to $2.25 range. Free cash flow generation is expected to be approximately $300 million, $20 million higher than the previous forecast. Expectations for strong business performance through the year, favorable tax expectations at the low end of the guidance range of 26 to 28% and favorable currency assumptions led to the raised guidance.

Other Stocks to Consider

Some other stocks worth considering in the sector include Berry Plastics Group, Inc. (BERY Quick QuoteBERY - Free Report) , Sonoco Products Co. (SON Quick QuoteSON - Free Report) and Crown Holdings Inc. (CCK Quick QuoteCCK - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy).

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