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Ball Corp (BALL) Hits 52-Week High: What's Aiding Its Rally?
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Ball Corporation (BALL - Free Report) shares scaled a new 52-week high of $63.55 on Feb 27 before closing the session a tad lower at $62.61. The company’s shares rallied following the news of the sale of its Aerospace business on Feb 16 and the fourth-quarter 2023 earnings release on Feb 1.
BALL has a market capitalization of $19.7 billion. The company’s shares have gained 12.7% over the past year compared with the industry’s growth of 0.3%.
Image Source: Zacks Investment Research
What’s Driving Ball Corp?
Sale of Aerospace Business: On Feb 16, the company announced that it completed the previously announced sale of its Aerospace business to BAE Systems, Inc. for $5.6 billion to focus more on its core packaging operations. This move marks Ball Corp’s focus on advancing sustainability through aluminum packaging solutions that support a waste-free world. BALL will use $4.5 billion in after-tax cash proceeds to decrease leverage and return value to shareholders.
Bottom-Line Improvement in Q4 & 2023: The company reported fourth-quarter 2023 adjusted earnings of 78 cents per share, beating the Zacks Consensus Estimate of 77 cents. The bottom line increased 77% year over year. Ball Corp reported 2023 adjusted earnings of $2.90 per share, in line with the Zacks Consensus Estimate. The bottom line increased 4% year over year.
Growing Demand for Beverage Cans: The beverage can industry is expected to gain as customers now prefer cans over plastic due to increasing awareness about environmental problems. Additionally, changing lifestyle choices, population growth and increasing disposable income have led to this shift.
An estimated 75% of beverage product launches are now in cans. Aluminum cans are the most widely recycled beverage packaging option. Also, ongoing packaging legislation in certain countries is expected to continue to drive aluminum beverage packaging growth.
The company envisions global volume growth of 4% for the foreseeable future and has been investing in capacity to meet this demand. By 2025, the global beverage can industry is projected to grow by 100 billion units. Of this, the company sees an opportunity to account for as much as 45 billion.
Strategic Actions Bode Well: Ball Corp has been executing its strategies to achieve better value for standard products and higher growth for specialty products. The company is focused on pursuing cost control, completing growth capital projects and capitalizing on the inherent sustainability attributes of metal packaging, which will benefit it in the foreseeable future.
In the fourth quarter of 2023, BALL announced plans to permanently cease production at its leased Kent, WA, facility in the first half of 2024. This will help the company restore the supply/demand balance amid current macroeconomic conditions. Also, its ongoing efforts to drive efficiency and productivity across the business, and optimize SG&A costs will aid earnings. The company expects to deliver long-term diluted earnings per share growth of at least 10-15%.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 41.2% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 76.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 32.2% in the past year.
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Ball Corp (BALL) Hits 52-Week High: What's Aiding Its Rally?
Ball Corporation (BALL - Free Report) shares scaled a new 52-week high of $63.55 on Feb 27 before closing the session a tad lower at $62.61. The company’s shares rallied following the news of the sale of its Aerospace business on Feb 16 and the fourth-quarter 2023 earnings release on Feb 1.
BALL has a market capitalization of $19.7 billion. The company’s shares have gained 12.7% over the past year compared with the industry’s growth of 0.3%.
Image Source: Zacks Investment Research
What’s Driving Ball Corp?
Sale of Aerospace Business: On Feb 16, the company announced that it completed the previously announced sale of its Aerospace business to BAE Systems, Inc. for $5.6 billion to focus more on its core packaging operations. This move marks Ball Corp’s focus on advancing sustainability through aluminum packaging solutions that support a waste-free world. BALL will use $4.5 billion in after-tax cash proceeds to decrease leverage and return value to shareholders.
Bottom-Line Improvement in Q4 & 2023: The company reported fourth-quarter 2023 adjusted earnings of 78 cents per share, beating the Zacks Consensus Estimate of 77 cents. The bottom line increased 77% year over year. Ball Corp reported 2023 adjusted earnings of $2.90 per share, in line with the Zacks Consensus Estimate. The bottom line increased 4% year over year.
Growing Demand for Beverage Cans: The beverage can industry is expected to gain as customers now prefer cans over plastic due to increasing awareness about environmental problems. Additionally, changing lifestyle choices, population growth and increasing disposable income have led to this shift.
An estimated 75% of beverage product launches are now in cans. Aluminum cans are the most widely recycled beverage packaging option. Also, ongoing packaging legislation in certain countries is expected to continue to drive aluminum beverage packaging growth.
The company envisions global volume growth of 4% for the foreseeable future and has been investing in capacity to meet this demand. By 2025, the global beverage can industry is projected to grow by 100 billion units. Of this, the company sees an opportunity to account for as much as 45 billion.
Strategic Actions Bode Well: Ball Corp has been executing its strategies to achieve better value for standard products and higher growth for specialty products. The company is focused on pursuing cost control, completing growth capital projects and capitalizing on the inherent sustainability attributes of metal packaging, which will benefit it in the foreseeable future.
In the fourth quarter of 2023, BALL announced plans to permanently cease production at its leased Kent, WA, facility in the first half of 2024. This will help the company restore the supply/demand balance amid current macroeconomic conditions. Also, its ongoing efforts to drive efficiency and productivity across the business, and optimize SG&A costs will aid earnings. The company expects to deliver long-term diluted earnings per share growth of at least 10-15%.
Zacks Rank & Stocks to Consider
BALL currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , AZZ Inc. (AZZ - Free Report) and Applied Industrial Technologies (AIT - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), and AZZ and AIT carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 41.2% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 76.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 32.2% in the past year.