Crown Holding Hits New 52-Week High - Analyst Blog

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Shares of Crown Holdings Inc. ( CCK ) reached a new 52-week high of $49.49 on Jun 5 before closing lower at $42.47. Crown Holdings has delivered a year-to-date return of 11.02%, outperforming the S&P 500 return of 5.93%. Average volume of shares traded over the last 3 months is approximately 1,121K.

Philadelphia-based Crown Holdings is a leading supplier of packaging products to consumer marketing companies with a market cap of $6.77 billion. The company has long-term estimated earnings per share growth rate of 11.65%.

Growth Drivers

Shares of Crown Holdings have been on the rise following its upbeat first-quarter results reported on Apr 14. Crown Holdings reported a 14% year-over-year rise in its first-quarter 2014 adjusted earnings to 57 cents per share, surpassing the Zacks Consensus Estimate of 51 cents.

For the second quarter of 2014, it expects earnings per share between 90 cents and $1.00, excluding any impact from the Mivisa acquisition. Including the impact of Mivisa and excluding the impact of share repurchases, full-year earnings per share are expected to exceed the previous guidance of $3.15 to $3.35.

In April, Crown Holdings completed the acquisition of Mivisa, a leading Spanish manufacturer of two and three-piece food cans and ends. Mivisa mainly serves the vegetable, fruit, fish and meat end markets with an approximately 10% market share of the European food can market.

The acquisition is a strategic fit for Crown Holdings and will significantly enhance the company's position in the strategic European food can segment by substantially increasing its presence in Spain, one of Europe's leading agricultural economies. The acquisition will boost margins of the European food can segment and is expected to be accretive to earnings in 2014.

Capacity additions in Cambodia, China, Malaysia, Thailand and Vietnam, as well as the startup of a new facility in Brazil will aid in continued global beverage can growth. Furthermore, Crown Holdings has embarked on a cost-reduction initiative to better align costs with ongoing market conditions in its European operations. This will result in annual cost savings of approximately $25 million.

Other Stocks to Consider

Crown Holdings currently holds a Zacks Rank #1 (Strong Buy). Other well performing packaging stocks include Proto Labs, Inc. ( PRLB ), Graphic Packaging Holding Co. ( GPK ) and Tupperware Brands Corp. ( TUP ). While Proto Labs sports a Zacks Rank #1, Graphic Packaging and Tupperware Brands hold a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.

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

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