Jefferies Drafts Ball Corporation As Its Franchise Pick

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Jefferies provided its outlook on Ball Corporation BLL in a Friday note, adding it to its franchise pick list.

The analysts view the company's 2017 FCF guide as being conservative, stating that, although the management expects net debt to stay at an elevated level for 2016, with ~$750 mil of one-time cash items coupled with $46 million of incremental dividend payment, it implies core FCF in 2H16 is closer to $800 million.

Related Link: Ball Corporation Is A Top Defensive Pick For Baird Analysts

"The latter gives us confidence 2017 FCF guide ($750 - 850 mil) is achievable and there's likely upside since guidance implies $20 - 50 mil in WC / other benefits, which seems conservative and there is potential for BLL to reach its $1 bil 2019 FCF target by 2018," wrote Jefferies.

The company has a Buy rating on Ball's shares with a $94 price target, which is based on average 11x 2018E EV/EBITDA and 17x MC/FCF.

Posted In: Analyst ColorAnalyst RatingsJefferies
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