Shares of Ball Corporation (BLL) reached a new 52-week high of $69.78 on Dec 3 and eventually closed trading marginally lower at $69.49. The stock price appreciation came on the back of strong Q3 earnings.
Ball Corporation has delivered a solid 1-year return of about 39.6% and a year-to-date return of 35.6%, outperforming the respective S&P 500. Average volume of shares traded over the last 3 months is approximately 1096K.
This Broomfield, CO-based company is the largest manufacturer of beverage cans in North America with a market cap of $9.5 billion and long-term estimated earnings per share growth rate of 11.1%. The company has surpassed the Zacks Consensus Estimate in all of the 4 trailing quarters with an average surprise of 13.12%.
Drivers
Shares of Ball Corporation started gaining since Oct 30 after the company reported third-quarter 2014 adjusted earnings of $1.10 per share, which handily beat the Zacks Consensus Estimate of $1.05. Moreover, the reported figure improved 10% year over year, aided by global cost containment along with strong manufacturing performance in its global beverage operations and aerospace business as well as a lower tax rate.
Ball Corporation revised its free cash flow guidance for 2014 and now expects it to exceed $600 million. The company anticipates capital spending of approximately $375 million for the full year. In addition, net full-year share buyback is expected to be in the range of $500 million. The company has maintained its long-term earnings per share growth goal of 10%–15%.
The shares also gained support on the news, announced on Nov 21, that Ball Aerospace & Technologies is providing the phased array antennas and flight test cameras to prime contractor Lockheed Martin Corporation (LMT) for Orion's Exploration Flight Test-1 (EFT-1), an unmanned test flight.
The company believes that there is growth potential in its Aerospace and Technologies segment. Ball Corporation has been selected by Laser Light Communications for its first global, all-optical commercial satellite system. Moreover, it successfully launched WorldView-3, the first multi-payload, super-spectral, high-resolution commercial satellite during the reported quarter. The Aerospace segment continues to pursue non-traditional growth projects while leveraging its existing capabilities in the government sector.
Ball Corporation will continue to benefit from its continuous focus on cost containment. Product launches and expansion in the emerging markets will also drive growth. In Metal beverage packaging, Americas & Asia, the company invested in additional specialty container in the U.S. Ball Corporation has also started construction at its existing Oss, Netherlands, facility to increase capacity by adding a new line, which will start up in the third quarter of 2015. In addition, Ball Corporation’s investment in India to meet increasing demand for extruded aluminum packaging in the region will also drive growth.
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 Sealed Air Corporation (SEE), both holding a Zacks Rank #2 (Buy)
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