Shares of Ball Corporation (BLL) reached a new 52-week high of $61.24 on May 28 and eventually closed trade at $60.10. The stock price appreciation came on the back of expected benefits from product launches and expansion in emerging markets.
Ball Corporation has delivered solid one-year return of about 36.9% and year-to-date return of 16.6%, outperforming the S&P 500. Average volume of shares traded over the last three months is approximately 1029K.
This Broomfield, CO-based company is the largest manufacturer of beverage cans in North America with a market cap of $8.4 billion and long-term estimated earnings per share growth rate of 12.9%. The company has outperformed the Zacks Consensus Estimate in all of the four trailing quarters with an average surprise of 11.41%.
Strengths of Ball Corporation
On May 19, Ball Corporation announced its intention to expand in Southeast Asia by building a one-line beverage can manufacturing plant in Myanmar. The new plant will supply beverage containers to Coca-Cola Pinya Beverages, a joint venture of The Coca-Cola Co. (KO) and to other customers as well. The Myanmar plant, which is expected to come online in mid-2015, will help the company to capitalize on the growing demand for beverage containers.
Additionally, the company’s aerospace & technologies segment has successfully completed the tests in the final phase of the Defense Advanced Research Projects Agency (DARPA) Membrane Optic Imager Real-Time Exploitation (MOIRE) telescope program. Apart from this, Ball Corporation released its sustainability report highlighting future goals.
The company also stated that it needs to focus on six key areas, namely innovation, operations, talent management, recycling, supply chain and community. By 2020, Ball Corporation aims to reduce the carbon footprint of its most common beverage can formats by 25%.
Continued product innovation efforts with introduction of significantly lighter weight aerosol and beverage cans will also drive growth for Ball Corporation. The new aerosol can will expectedly be launched in the U.S. in 2015. This particular can will be 10% lighter than the cans used at present.
Further, Ball Corporation reported first-quarter 2014 adjusted earnings of 81 cents per share, which easily beat the Zacks Consensus Estimate of 68 cents. Moreover, the reported figure surged 40% year over year, aided by global packaging volume growth and manufacturing efficiencies.
The company affirmed its free cash flow range of $550 million for full-year 2014. Moreover, it maintained the long-term diluted earnings per share growth goal of 10%–15%.
Ball Corporation believes that there is growth potential in many of its segments. Metal beverage packaging, Americas & Asia will benefit from the Alagoinhas plant's third production line in Brazil, which is on track. The company has also initiated cost control measures in Europe, the benefits of which are expected to be realized through 2014 and 2015.
Ball Corporation currently has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked stocks in the same sector include Crown Holdings Inc. (CCK) and Graphic Packaging Holding Company (GPK). While Crown Holdings sports a Zacks Rank #1 (Strong Buy), Graphic Packaging carries a Zacks Rank #2 (Buy).
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