Ball Corporation Hits New 52-Week High - Analyst Blog

Shares of Ball Corporation BLL reached a new 52-week high of $59.98 on May 14 and eventually closed trade at $59.69. The stock has been gaining momentum since reporting upbeat earnings results for the first quarter of 2014 on May 1. Moreover, this metal and plastic packaging manufacturer for beverages and foods, has amassed a year-over-year return of 32.33%, outperforming the S&P 500 return of 18.1%. Average volume of shares traded over the last 3 months was approximately 1025K.

Ball Corporation has a market cap of $8.32 billion. In the past 52 weeks, Ball Corporation has traded between a low of $41.52 and the current high of $59.69. Shares of the company are currently trading at a forward price-earnings (P/E) ratio of 15.88x, a 2% discount to the peer group average of 16.14x. Ball Corporation has long-term estimated earnings per share growth rate of 11.07%.

What's Driving Ball Corporation Upward?

The upsurge in the stock price reflects the company's positive earnings momentum. We have observed that Ball Corporation has beaten the Zacks Consensus Estimate in the last 4 quarters, registering an average positive surprise of 11.41%. In the last concluded quarter, earnings per share outdid the Zacks Consensus Estimate by 19.12%.

Ball Corporation reported first-quarter 2014 adjusted earnings of 81 cents per share, which outperformed the Zacks Consensus Estimate of 68 cents. Moreover, the reported figure surged 40% from the year-ago quarter, aided by global packaging volume growth and manufacturing efficiencies.

The company affirmed its free cash flow range of $550 million for full-year 2014. The company has maintained its long-term diluted earnings per share growth goal of 10–15%.

Ball Corporation will continue to benefit from product launches and expansion in emerging markets. Moreover, the company 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. This increased capacity will help the company to capitalize on the increased demand spurred by the upcoming soccer World Cup in Brazil.

In December, Ball acquired Envases del Plata S.A. de C.V., a leading producer of extruded aluminium aerosol packaging in Mexico. Demand for extruded aluminum packaging for personal care products continues to increase, thus providing new opportunities for Ball's growing business. Ball has also initiated cost cutting measures in Europe, the benefits of which are expected to be realized in 2014 and 2015.

Other Stocks to Consider

Ball Corporation retains a short-term Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Crown Holdings Inc. CCK, Sealed Air Corporation SEE and Graphic Packaging Holding Company GPK. While Crown Holdings sports a Zacks Rank #1 (Strong Buy), Sealed Air and Graphic Packaging carry a Zacks Rank #2 (Buy).

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