Silgan Holdings Inc. (SLGN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


We have reiterated our Neutral recommendation on Silgan Holdings with a target price of $53.00. In third-quarter 2014, the company's earnings increased 8% year over year to $1.33 per share, close to the upper end of the company's guidance range of $1.25 to $1.35. Total revenue went up 5% year over year to $1.23 billion. Silgan will benefit from the acquisition of Van Can Company and Portola Packaging. Increasing productivity and cost reduction initiatives, such as the Can Vision 2020, will also drive growth. However, the anticipation of decline in the resin market in 2015 and high debt-to-capitalization ratio remain concerns. Hence, Silgan trimmed its earnings per share guidance for 2014 to the range of $3.10 $3.20.


Silgan Holdings Inc. is one of the leading North American manufacturers of metal and plastic consumer goods packaging products. Its products are used in diverse end-markets. It is the largest metal-container supplier for food products in North America. The company has 81 manufacturing plants throughout North and South America, Europe and Asia. Its product lines include steel and aluminum containers for human and pet food custom-designed plastic containers for personal care, healthcare, pharmaceutical, household, industrial chemical, food, pet care, agricultural chemical, automotive and marine chemical products and metal, composite and plastic closures for food and beverage products. Some of the world's best-known branded consumer products, including Campbell's Soup, Del Monte Fruits and Vegetables, Listerine and Friskies Pet Food, use Silgan's containers.

The Metal Food Container (MFC) (67% of total revenue in the third quarter of fiscal 2014) business is engaged in the manufacture and sale of steel and aluminum containers used primarily by processors and packagers of food products such as metal containers for soup, vegetables, fruit, meat, coffee, pet food and other miscellaneous goods. Silgan holds around 50% of the market share in the U.S. metal food container market.

The Closures business (20%) manufactures and sells metal, composite and plastic vacuum closures for food and beverage products. The segment also provides sealing/capping equipment to complement its closure product offering.

The Plastic Container business (13%) is one of the leading North American manufacturers of custom-designed high-density polyethylene (HDPE) for personal care, healthcare and household and industrial chemical products. The segment also makes polyethylene terephthalate (PET) containers for the personal care market. It produces plastic containers from a full range of resin materials and offers a wide array of molding and decorating capabilities.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: MFC , SLGN

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