Berry Plastics (BERY) Hits 52-Week High On Solid Q3 Results

Shares of Berry Plastics Group, Inc. (NYSE:BERY) scaled a 52-week high of $42.70 on Aug 10. This stock price appreciation came on the back of robust third-quarter fiscal 2016 results and raised guidance.

Berry Plastics has a market capitalization of roughly $5.2 billion. Average volume of shares traded over the last three months is around 1.45 million. The stock has a one-year return of about 48.5% and a year-to-date return of around 18%. Moreover, it surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive surprise of 13.97%.

Growth Drivers

Berry Plastics posted third-quarter adjusted earnings of 82 cents per share, which soared around 61% year over year and comfortably beat the Zacks Consensus Estimate of 60 cents. Net sales also surged around 33% year over year to a record $1.65 billion in the quarter.

Backed by a strong fiscal third-quarter performance, Berry Plastics raised its operating EBITDA guidance to $1,200 million for fiscal 2016. Adjusted free cash is projected at $475 million, with the forecasted improvement in operating EBITDA being offset by incremental cash taxes and the timing of interest payments.

The integration of AVINTIV acquisition continues to exceed Berry Plastics’ initial expectations. The company initially announced $50 million of cost synergies from the AVINTIV buyout. However, it raised this estimate to $65 million and eventually to $80 million in the first and second-quarter earnings calls. It expects that further future synergies will be achieved from information technology integration and new commercial revenue opportunities.

Berry Plastics continues to be optimistic about healthcare, pharmaceuticals, personal care and food packaging growth opportunities outside North America, especially in Asia and Latin America. The company predicts per capita consumption increases to boost organic growth in the regions.

Moreover, it will continue to take the necessary proactive steps to remain competitive and lead the markets where the company participates through a relentless focus on building and strengthening competitive advantages.

Berry Plastics currently holds a Zacks Rank #2 (Buy).

Stocks to Consider

Other stocks in the same sector that warrant a look include Packaging Corporation of America (NYSE:PKG) , ACCO Brands Corporation (NYSE:ACCO) and AO Smith Corp. (NYSE:AOS) . All the three stocks hold the same Zacks Rank as Berry Plastics.