Ball Corporation Faces Challenges Despite Earnings Beat
Headquartered in Westminster, Colorado, Ball Corporation (BALL) is significant in both the packaging and aerospace sectors. With a market cap of $18.2 billion, the company focuses on providing sustainable, innovative packaging solutions, especially aluminum beverage containers, while also advancing technology in aerospace.
Stock Performance Shows Underwhelming Growth
Over the past year, Ball Corporation’s stock has lagged behind the broader market. It has gained 16.2% in comparison to the S&P 500 Index ($SPX), which has soared nearly 30.6%. In 2024, BALL stock has increased by 5.8%, whereas SPX has posted a 23.6% return year-to-date.
Mixed Earnings Report Leads to Stock Decline
In a closer examination, BALL stock has outperformed the Materials Select Sector SPDR Fund’s (XLB) 14.6% gain over the past 52 weeks. However, shares fell by 7.7% after the release of its Q3 earnings on October 31, reflecting a mixed bag of financial results. The company reported revenue of $3.08 billion, which fell short of analysts’ expectations of $3.13 billion, marking a 13.7% decline year-over-year.
Encouraging Earnings Metrics Provide Some Hope
Despite the revenue miss, Ball Corporation achieved an adjusted EPS of $0.91, exceeding consensus estimates by 6%. The gross margin also saw an improvement to 21.3%, up from 19% last year. Furthermore, the operating margin significantly increased to 16.7%, a notable rise from 9.1% in the same quarter last year.
Analyst Ratings Reflect Cautious Optimism
Looking ahead, analysts predict Ball Corporation’s EPS will grow 8.6% year-over-year to $3.15 per share for the current fiscal year ending in December. The company has topped earnings expectations in each of the last four quarters, indicating a strong performance history.
Among the 14 analysts monitoring BALL stock, the consensus rating is a “Moderate Buy.” This reflects five “Strong Buy” ratings, two “Moderate Buys,” six “Holds,” and one “Strong Sell.” This outlook has shifted slightly from three months ago, when six analysts labeled it a “Strong Buy.”
Price Targets Suggest Potential for Upside
On November 4, Jefferies analyst Philip Ng maintained a “Buy” rating for Ball Corporation, with a price target of $80, indicating a potential upside of 31.4% from current levels. The mean price target stands at $71.77, which represents a 17.9% premium compared to BALL’s current price. Notably, the highest price target of $83 suggests an upside potential of 36.4%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
