William Blair & Co. Reiterates Outperform Rating on AptarGroup (ATR)

William Blair & Co. is out with a research report this morning, where it reiterates its Outperform rating on AptarGroup Inc. (NYSE: ATR); it did not provide a price target for the stock.

The WB analysts said, “Aptar reported second-quarter results that significantly exceeded expectations after the market close on Tuesday. Earnings per share of $0.67 exceeded our estimate of $0.62 and consensus of $0.63, as well as the high end of management’s guidance range of $0.60 to $0.65. Revenue of $522.9 million grew 19% year-over-year, exceeding our estimate by 8% and consensus by 6%. A 3% currency headwind was slightly below our estimate of -3.7%, and organic revenue growth of 22% significantly exceeded our projection of 14%.”

They noted, “Outperformance was driven by stronger-than-expected volume growth in all three segments, and demand was reportedly particularly strong from the fragrance/cosmetic and personal care markets. Beauty and Home segment sales grew 26% organically, and the Closures segment sales grew 20% organically (although operating margin of 13.2% for the Closures segment fell short of our estimate of 14.5%, we believe reflecting a more significant impact from resin prices than we had modeled). The Pharma segment returned to organic growth for the first time since fourth quarter 2008, with organic growth of 13% during the second quarter.”

They also said, “The company provided a third-quarter guidance range of $0.61 to $0.66, versus the current consensus estimate of $0.61. Management indicated that they are encouraged by an increase in project activity primarily in the food and beverage markets, and that they are “cautiously optimistic” that the markets they serve will continue to recover from the economic downturn.

“Aptar is trading at 7.2 times enterprise value to our 2010 EBITDA estimate and at 16.6 times earnings, a discount to historical ranges. With second-quarter results surpassing the high-end of the company’s guidance on strong volume growth, third-quarter guidance exceeding expectations, and positive commentary on demand trends.”