Ball Corp Hit With Downgrades, Price Target Cuts Post Q2 Results

  • Mizuho Securities analyst Christopher Parkinson lowered the price target for Ball Corp BALL to $74 from $98 while maintaining the Neutral rating on the shares.
  • The analyst mentions that BALL's underlying BevCan demand moderated in 2Q as global volumes increased 3.3%, with North American dragging down previous expectations. He still foresees North American customers emphasizing price over volume during 2H but says demand could rebound if prices begin to moderate.
  • The analyst is a bit surprised about the magnitude of the pullback. However, he thinks the retreat is justified by several reasons, including uncertainty about its North America growth momentum, further weakness in EMEA operating income, the impending removal of the Russia biz, and a slower ramp of previously announced growth initiatives.
  • RBC Capital analyst Arun Viswanathan lowered the price target on Ball to $64 (an upside of 14%) from $74 while still maintaining the Sector Perform rating on the shares.
  • The analyst mentions that business will be challenged over the near term given the multiple headwinds.
  • He believes in the long-term growth potential for bev cans and BALL's management team to navigate these choppy waters and right-size the business.
  • Viswanathan mentions that the stock is fairly valued and waiting for a better entry point.
  • Truist analyst Michael Roxland lowered Ball's price target to $61 (an upside of 8%) from $93 while maintaining the Hold rating on the shares.
  • The analyst says his price reduction mirrors North American volume weakness and lower capital return to shareholders.
  • Ball Corp management has indicated that the demand decline is due to a weaker consumer. But, the analyst thinks part of the issue may also be due to its recent capacity expansions in the southwest.
  • Deutsche Bank analyst Kyle White downgraded Ball to Hold from Buy and lowered the price target to $65 (an upside of 16%) from $81, post the Q2 results.
  • The analyst points out that the deceleration in U.S. beverage can demand for the downgrade.
  • White states that while the multi-year growth story for beverage cans still exists globally, there are better ways to capture this opportunity relative to Ball.
  • Price Action: BALL shares are trading lower by 5.41% at $56.07 on the last check Friday.
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Posted In: Analyst ColorNewsDowngradesPrice TargetReiterationAnalyst RatingsBriefs