Crown Holdings Inc. (CCK - Free Report) is a leading global manufacturer of packaging products for consumer goods. Headquartered in Philadelphia, PA, Crown Holdings makes a wide variety of steel and aluminum cans for food, beverage, household along with other consumer products and metal vacuum closures and caps.
Currently, the company carries a Zacks Rank #3 (Hold). Here's why investors should hold on to the stock at present.
Positive Surprise History
Crown Holdings has outpaced the Zacks Consensus Estimate in the trailing four quarters. The company has a positive average earnings surprise of 1.75%.
Earnings Estimate Revisions
Investors should consider the positive trends on the estimates revision front. Analysts have been raising their estimates Crown Holdings lately, and the earnings picture is looking favorable for the company.
In the past 90 days, the Zacks Consensus Estimate fiscal 2017 has gone up 2% to $4.02 and for fiscal 2018 has moved up 2% to $4.45.
Return on Assets (ROA)
Crown Holdings currently has a ROE of 5.41% while the industry's ROE is 4.23%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
The company outperformed the industry it belongs to in the past year. The stock has gained 10.4% while the industry rose 8.7%.
Crown Holdings’ trailing 12-month price earnings (P/E) ratio is 15.5, while the industry's average trailing 12-month P/E ratio is at 19.5. Consequently, the stock is cheaper at this point.
Value Growth Momentum (VGM) Score
In aggregate, Crown Holdings currently has a Zacks VGM score of A. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three scores (Value - B, Growth - A, Momentum - B). Such a score allows you to eliminate the negative aspects of stocks and select winners. The VGM Score of A along with some other key metrics makes the company a solid choice for investors.
Growing Demand for Beverage Cans
The global beverage can business continues to be the major strategic focus for organic growth for the company. Globally, the industry demand for beverage cans has been on the rise in the past few years, which is expected to continue. Growth of beverages such as energy drinks, teas, juices, sparkling waters and craft beer as well as increased preference for cans over certain other forms of beverage packaging is fueling growth.
Emerging markets such as Southeast Asia and Mexico have experienced higher growth rates due to rising per capita incomes and the corresponding increase in beverage consumption. The more mature economies in Europe and North America have also seen market expansion. Crown Holdings’ acquisition of Empaque in 2015 significantly augmented strategic position in beverage cans and presence in the growing Mexican market. Further, to meet growing beverage can demand, Crown Holdings intends to build new facilities and is positioned to gain from the geographic expansion of beverage can lines.
Investors might want to hold on to the stock at present as it has ample positive prospects of outperforming peers in the near future.
Stocks to Consider
Some better-ranked stocks in the industrial product space include Caterpillar Inc. (CAT - Free Report) , AGCO Corporation (AGCO - Free Report) and Komatsu Ltd. (KMTUY - Free Report) . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar has expected long-term earnings growth rate of 9.5%.
AGCO has expected long-term earnings growth rate of 13.5%.
Komatsu has expected long-term earnings growth rate of 12.7%.
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