Ball Corporation Hits 52-Week High On Solid Q3 Performance

Shares of Ball Corporation (NYSE:BLL) scaled a fresh 52-week high of $50.98 during trading session on Nov 16, before retracing a bit to close at $50.50.

The company has a market cap of $17.1 billion. Over the last three months, its average volume of shares traded has been approximately 3.15M.

Also, Ball Corporation surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average positive earnings surprise being 4.96%.

Price Performance

Notably, the stock has rallied 27% in a year’s time, higher than the S&P 500’s gain of around 6%. Additionally, Ball Corporation has outperformed 9% growth recorded by the industry during the same time frame.

Investors are optimistic on this Zacks Rank #3 (Hold) company, backed by Ball Corporation’s solid third-quarter 2018 results, lower debt level and strong backlog.

In addition, Ball Corporation has an impressive VGM Score of B. In this, V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of these three scores. Such a score eliminates the negative aspects of stocks and selects winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.

Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities.

What Led to the 52-week High?

Ball Corporation’s shares have gained 6% since the company reported third-quarter results on Nov 1, 2018. Its adjusted earnings and revenues improved on a year-over-year basis in the third quarter. The company’s results were driven by solid operational performance in every business, as well as lower corporate costs, despite certain start-up costs, elevated transportation costs and higher effective tax rate.

Ball Corporation expects its free cash flow will be around $800 million and capital spending will be 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.

Ball Corporation remains on track with deleveraging and anticipates net debt to comparable EBITDA ratios of 3.0-3.5 times by the end of this year. Furthermore, the net $50 million of annual fixed cost savings associated with the North American optimization program is anticipated to benefit the company’s fourth-quarter 2018 performance and beyond.

Ball Corporation anticipates its aerospace segment to produce operating earnings improvement in the current quarter as new contracts ramp up. With contracted backlog levels at a record $2 billion, and won-not-booked backlog now exceeding $5 billion, the future looks brighter for the aerospace segment for the next 3-5 years.

The above-mentioned tailwinds have raised investors’ optimism in the stock and will likelyboost the company’s share price in the days ahead.

Stocks to Consider

Some better-ranked stocks in the same space include Enersys (NYSE:ENS) , Mobile Mini, Inc. (NASDAQ:MINI) and Rexnord Corporation (NYSE:RXN) . While Enersys sports a Zacks Rank #1 (Strong Buy), Mobile Mini and Rexnord 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%. The stock has rallied 29% in a year’s time.

Mobile Mini has a long-term earnings growth rate of 14%. The company’s shares have gained 21% during the past year.

Rexnord has a long-term earnings growth rate of 16.4%. Its shares have gained 21% over the past year.

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