(ATR - Free Report
) remains well poised to gain from its ongoing business-transformation plan, product roll outs, focus on improving operations and acquisitions.
Lets’ delve deeper into the factors that make this stock a lucrative pick.
Upbeat Q3 Guidance: The company projects earnings per share for the third quarter at 90-95 cents, excluding any restructuring expenses and effects associated with the CSP Technologies acquisition. The guidance reflects year-over-year growth of 11% at the mid-point. AptarGroup expects its core sales to grow in each segment in the third quarter. The Zacks Consensus Estimate for the third quarter is at 93 cents, exhibiting year-over-year growth of 12%.
Northward Bound Estimates: Estimates for AptarGroup have been revised upward over the past 30 days, reflecting the brokers’ confidence in the stock. The stock has witnessed the Zacks Consensus Estimate for both 2018 and 2019 moving north by 3%.
Growth Expectations: The Zacks Consensus Estimate for current-year earnings per share is pegged at $3.90, representing year-over-year increase of 13%. For 2019, the consensus estimate for earnings per share is pegged at $4.29, projecting a year-over-year rise of 10%.
The long-term expected earnings growth is pegged at 8.5%.
Its shares gained 29% in a year’s time, outperforming the industry
’s growth of 3%.
Return on Assets (ROA): AptarGroup currently has a ROA of 7.4%, while the industry's ROA is 5.7%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Positive Earnings Surprise History: AptarGroup has surpassed earnings estimates in the trailing four quarters, delivering an average positive earnings surprise of 8.05%.
Growth Drivers in Place: In late 2017, AptarGroup began a business-transformation plan in a bid to become a more agile, competitive and customer-centric business. This plan includes a wide range of initiatives to drive sales growth, enhance operational excellence along with improving organizational health and effectiveness. AptarGroup is positioned well to gain from its focus on the plan which is likely to yield annual recurring incremental EBITDA of approximately $80 million by the end of 2020.
AptarGroup remains committed to its strategy of expanding business through inorganic growth. The company has made a binding offer to acquire CSP Technologies that will help AptarGroup bolster its existing business in the Pharma and Food Safety markets. Further, the company acquired 100% of the common stock of Reboul, a French manufacturer specializing in stamping, decorating and assembling metal and plastic packaging for the cosmetics and luxury markets. AptarGroup is also well poised to gain from product launches.
Considering these positives, we believe investors should retain AptarGroup stock for now. The stock's Zacks Rank #3 (Hold) and Zacks VGM Score
of B seems to suggest the same. Here V stands for Value, G for Growth and M for Momentum. Such a score allows you to eliminate the negative aspects of stocks and select winners. The VGM Score of B, along with some other key metrics, makes the company a solid choice for investors.
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