Ratings Across the Industry
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Ball (NYSE:BALL) and Crown Holdings (NYSE:CCK) received Equal Weight ratings in the latest research coverage of paper and packaging stocks by Morgan Stanley. The financial-services firm deemed these companies to be appropriately valued within an industry that they rate as In-Line with the broader market.
Insights on Ball and Crown Holdings
Ball’s recent divestment of its aerospace division is predicted to lead to lower earnings. Analysts believe that this decline can be mitigated through share buybacks and reduced interest expenses. However, they caution that the company’s mid-single-digit earnings per share growth guidance is overly optimistic, leaving minimal margin for error.
Crown Holdings is currently trading at a discounted enterprise value of 9.4 times earnings before interest, taxes, depreciation, and amortization for 2024. This valuation is seen as a reflection of various uncertainties, including exposure to weaker Southern European markets, subdued demand in Southeast Asia, and softness in segments such as aerosol cans and can making equipment.
Ardagh Metal Packaging Under the Microscope
Morgan Stanley also commenced coverage of Ardagh Metal Packaging (NYSE:AMBP) with an Underweight rating. Analysts highlighted the company’s critical revenue drivers but raised concerns about its high debt levels. Additionally, Ardagh Metal Packaging faces significant financial obligations for dividends, interest, and capital expenditures. The report also identified liquidity constraints due to its ownership structure.
