Shares of Ball Corporation (NYSE:BLL) have outperformed the industry on a year-to-date basis. The stock has gained 31% compared with the industry’s growth of 12%.
Ball Corporation (BLL): Free Stock Analysis Report
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CECO Environmental Corp. (CECE): Free Stock Analysis Report
Enersys (ENS): Free Stock Analysis Report
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Zacks Investment Research
Let’s delve deeper and analyze the reasons behind the company’s impressive price performance and find out if there is room for further appreciation:
Better-than-Expected Q3 Results: Ball Corporation reported third-quarter 2018 adjusted earnings of 56 cents per share, increasing 7.7% year over year. However, the reported figure missed the Zacks Consensus Estimate of 60 cents. The company’s results were driven by strong operational performance in every business and lower corporate costs, despite certain start-up costs, elevated transportation costs and higher effective tax rate.Total revenues inched up 1.3% year over year to $2,946 million in the last reported quarter.
Solid 2018 & 2019 Ahead: Ball Corporation anticipates its free cash flow to be around $800 million and capital spending in excess of $700 million in 2018. Notably, it reaffirms comparable EBITDA guidance of $2 billion and expects free cash flow of more than $1 billion in 2019. In 2019 and beyond, the company expects earnings per share to be up 10-15%. Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. The company will also focus on pursuing cost-out programs, completing growth capital projects and commercializing on the inherent sustainability attributes of metal packaging.
Healthy Growth Projections: For fiscal 2018, the Zacks Consensus Estimate for earnings per share is at $2.21, projecting year-over-year growth of 8% while the same for 2019 anticipates a rise of 18% to $2.61.
Positive Earnings Surprise History: Ball Corporation surpassed the Zacks Consensus Estimate in three of the trailing four quarters recording average beat of 4.96%. This is reflects its operational efficiencies.
Growth Drivers: In 2018, Ball Corporation will focus primarily on expanding its geographic footprint, aligning with the right customers and markets, growing with new products and capabilities, and leveraging its technical knowhow. In sync with this, the company commenced production at all four new facilities of its specialty beverage-can manufacturing facility in Goodyear during the third quarter. To support growth for beverage cans in the Iberian Peninsula, the company constructed a two-line, aluminum beverage can manufacturing facility near Madrid, Spain, with a majority of the facility’s capacity secured under a long-term customer contract. The facility began initial commercial production on one line in July 2018 and will produce multiple can sizes once it is fully operational. The company also intends to invest in its beverage container plant in Nogara, Italy.
The company expects to benefit from outstanding requests for bids and proposals, and contracts wins. Notably, the company has won approximately $5.3 billion in contracts which have not been included in the current backlog. The company is also on track to realize the synergies from the Rexam acquisition which was concluded in June 2016.
Ball Corporation continues to execute its long-term strategy of growing earnings through increasing revenues above cost growth, driving more mix shift to specialty containers, actively managing supply and demand. It also remains focused on developing innovative aluminum packaging products and expanding business with strong cash flow and EVA returns.
The company has a long term estimated earnings growth rate of 5.5%.
Favorable Rank, Score Combination: This Zacks Rank #3 (Hold) stock carries a favorable VGM Score of B. This helps to identify stocks with the most attractive value, best growth rate and solid momentum.
Stocks to Consider
Better-ranked stocks in the same industry include Enersys (NYSE:ENS) , CECO Environmental Corp. (NASDAQ:CECE) and Flowserve Corp. (NYSE:FLS) . While Enersys flaunts a Zacks Rank #1 (Strong Buy), CECO and Flowserve carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys has a long-term earnings growth rate of 10%. Its shares have rallied 24% year to date.
CECO has a long-term earnings growth rate of 15%. The company’s shares have surged 57% year-to-date.
Flowserve has a long-term earnings growth rate of 17.3%. The stock has gained 13% year to date.
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Ball Corporation (BLL): Free Stock Analysis Report
Flowserve Corporation (FLS): Free Stock Analysis Report
CECO Environmental Corp. (CECE): Free Stock Analysis Report
Enersys (ENS): Free Stock Analysis Report
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Zacks Investment Research
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