Will Rise In Beverage Cans Demand Benefit Crown Holdings?

We issued an updated research report on Crown Holdings Inc. (NYSE:CCK) on Jun 15, 2016. The manufacturer of packaging products for consumer goods is expected to benefit from rise in global beverage can demand. The acquisition of EMPAQUE, increased investments and geographic expansion will also aid growth.

Notably, Crown Holdings intends to build new facilities to meet this increase in demand of beverage can. Management also remains optimistic about Mexican can demand, which continues to be strong. The two large beverage can projects are on schedule. The Monterrey, Mexico plant is expected to commence commercial shipments in the fourth quarter of 2016 whereas the Nichols, NY project is slated to begin in the first quarter of 2017.

The company has doubled the production capacity at the Osmaniye, Turkey plant, with the addition of a second production line. Commercial start-up is expected in the fourth quarter this year. Crown Holdings also continues to see beverage and food can growth in Southeast Asia. It is constructing new beverage can plants in Phnom Penh, Cambodia. The third plant in China is scheduled to start commercial operations in the second quarter this year.

Crown Holdings will also continue to identify and evaluate growth opportunities through potential and strategic acquisitions in geographic areas. In Feb 2015, the company acquired EMPAQUE. The addition of EMPAQUE significantly improved the company's presence in the growing Mexican market alongside substantially enhancing its strategic position in beverage cans, both regionally and globally.

Crown Holdings reaffirmed its full-year 2016 adjusted earnings per share guidance of $3.70–$3.90. For second-quarter 2016, the company guided earnings of between $1.05 and $1.15 per share.

In addition, fall in oil prices and the consequent drop in resin cost will be a cost tailwind for Crown Holdings. On the other hand, lower gasoline prices will lead to a positive turn in consumer spending patterns. This will bring about a rise in packaging demand, thereby facilitating its growth.

Crown Holdings currently has a Zacks Rank #2 (Buy).

Stocks to Consider

Some other stocks worth considering in the same sector include ACCO Brands Corp. (NYSE:ACCO) , General Cable Corp. (NYSE:BGC) and Brady Corp. (NYSE:BRC) . All of these stocks sport a Zacks Rank #1 (Strong Buy).


GENL CABLE CORP (BGC): Free Stock Analysis Report

CROWN HLDGS INC (CCK): Free Stock Analysis Report

BRADY CORP CL A (BRC): Free Stock Analysis Report

ACCO BRANDS CP (ACCO): Free Stock Analysis Report

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