The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Ball (NYSE:BALL) and the rest of the industrial packaging stocks fared in Q1.
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 8 industrial packaging stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.9%.
While some industrial packaging stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.2% since the latest earnings results.
Best Q1: Ball (NYSE:BALL)
Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Ball reported revenues of $3.10 billion, up 7.8% year on year. This print exceeded analysts’ expectations by 6.7%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ organic revenue and adjusted operating income estimates.
"We delivered strong first quarter results, returning $612 million to shareholders. Our solid financial foundation, leaner operating model and focused growth strategy enabled us to drive meaningful volume and comparable diluted earnings per share growth. While we remain mindful of heightened geopolitical uncertainty in select markets, we are confident in our ability to meet our 2025 objectives. Our commitment to operational excellence remains central to our strategy. We continue to unlock manufacturing efficiencies, invest in innovation and sustainability, and tightly manage our cost structure. These actions position us well to navigate near-term challenges and consistently deliver long-term value for our shareholders," said Daniel W. Fisher, chairman and chief executive officer.
Ball Total Revenue
Ball achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 2.3% since reporting and currently trades at $50.66.
Formerly Crown Cork & Seal, Crown Holdings (NYSE:CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.
Crown Holdings reported revenues of $2.89 billion, up 3.7% year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Crown Holdings Total Revenue
The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $97.10.
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Graphic Packaging Holding reported revenues of $2.12 billion, down 6.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations.
Graphic Packaging Holding delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 13.6% since the results and currently trades at $21.85.
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Packaging Corporation of America reported revenues of $2.14 billion, up 8.2% year on year. This print surpassed analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ sales volume estimates and a decent beat of analysts’ adjusted operating income estimates.
The stock is down 3.4% since reporting and currently trades at $180.
Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Avery Dennison reported revenues of $2.15 billion, flat year on year. This result was in line with analysts’ expectations. Aside from that, it was a slower quarter as it recorded EPS guidance for next quarter missing analysts’ expectations.
The stock is down 1.9% since reporting and currently trades at $171.66.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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