Ball Corp (BLL) Scales New 52-Week: What's Driving The Stock?
Zacks Investment Research | May 13, 2019 06:44AM ET
Shares of Ball Corporation (NYSE:BLL) scaled a fresh 52-week high of $64.64 during trading session on May 10, before retracing a bit to close at $64.31.
The company has a market cap of $21.5 billion. Over the last three months, its average volume of shares traded has been approximately 2.12M. The company has an expected long-term earnings per share growth rate of 5.50%.
Notably, the stock has rallied 67.7% in a year’s time, higher than the S&P 500’s gain of around 4.8%. Additionally, Ball Corporation has outperformed 44.2% growth recorded by the industry during the same time frame.
Driving Factors
In the first quarter of 2019, overall global beverage can demand climbed more than 8% — levels not seen in a long time. Customers are now preferring cans over glass and plastic. Ball Corporation remains well poised to meet this growing demand. The company remains actively focused on expanding geographic footprint, aligning with the right customers and markets, growing with new products and capabilities, and leveraging its technical know-how. The company anticipates capital spending to be $600 million in the current year.
The company reaffirmed its comparable EBITDA guidance of $2 billion and expects free cash flow of more than $1 billion in 2019, backed by continued solid demand for aluminum packaging and robust aerospace backlog. For the ongoing year, contributions from its new lines, year-over-year impact of SG&A improvement undertaken in 2018 and plant-cost initiatives will boost earnings growth and margin expansion. In 2019 and beyond, the company anticipates earnings per share to be up 10-15%.
Ball Corporation’s North American segment will likely benefit from fixed cost savings associated with the North American optimization program, volume growth, improved aluminum can-sheet quality, and reduce start-up costs in 2019 and beyond. The South American industry trends remain strong, with cans being the favored package in the beer, tea, energy and hard alcohol categories. Further, expansions in Paraguay remain on track, while the ones in Argentina and Chile are already contributing to the segment’s growth.
The company’s aerospace business delivered stellar revenues and operating earnings in the first quarter, aided by solid contract performance. The Aerospace business is poised to witness revenue growth of more 15% this year. With contracted backlog levels of $2.1 billion at the end of the first quarter and won-not-booked backlog at $4.9 billion, the future looks brighter for aerospace for the next three to five years. Further, the company is initiating additional products to expand its aerospace infrastructure and testing capabilities.
Get The News You Want
Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. Specialty cans now represent more than 43% of its mix compared with 30% in 2016. The company focuses on pursuing cost-out programs, completing growth capital projects and commercializing on the inherent sustainability attributes of metal packaging, which will benefit it in the days ahead.
Positive Growth Projections
The Zacks Consensus Estimate for Ball Corporation’s 2019 earnings per share is currently pegged at $2.61, indicating year-over-year growth of 18.6%. The same for 2020 is pinned at $2.97, calling for a year-over-year rise of 13.7%.
Ball Corporation Price and Consensus
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