Silgan Holdings Inc. SLGN shares scaled a new 52-week high of $157.61 on Monday before closing the session lower at $57.12.
SLGN has a market capitalization of $6 billion. The company’s shares have gained 39.9%, outperforming the industry’s growth of 18.7% and the S&P 500 index’s rise of 32.9%.
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What’s Aiding Silgan Holdings’ Stock Performance?
Strong Segmental Performances: The Metal Containers segment is gaining from volume increases. The company expects the segment’s 2024 volumes to be in line with the 2023 reported level. The segment’s adjusted operating income reached a record high in 2023, marking the sixth consecutive year of record adjusted operating income.
The segment will benefit from a strong operating performance, including the benefit of an inventory management program and higher average selling prices due to the pass-through of inflationary costs. The Dispensing and Specialty Closures segment delivered record dispensing product volumes in the third quarter of 2024.
The Custom Containers segment is also gaining from favorable price/cost, including mix and higher volume, due to the commercialization of business awards. These gains will boost the company’s performance.
Upbeat 2024 Outlook: SLGN projects adjusted earnings per share of $3.55-$3.65 for 2024, indicating 6% year-over-year growth at the mid-point. The company expects the volume/mix in the Dispensing and Specialty Closures segment and volumes in Custom Containers to be higher than the 2023 reported level.
It expects a free cash flow of $375 million for 2024, suggesting a rise from the $357 million reported in 2023.
Solid Capital Allocation & Acquisitions: Silgan Holdings has been gaining from a disciplined capital allocation model and a strong operational performance. The company expects strong operating performances and improvements in working capital to drive the free cash flow.
In October 2024, the company acquired Weener Packaging for €838 million ($909 million). This move is consistent with the company's strategy for expanding its Dispensing and Specialty Closures franchise. The buyout will help the company generate attractive cash returns in the near term. Silgan Holdings is focused on deploying capital to expand its business and reduce operating costs while increasing shareholder returns.
SLGN’s Zacks Rank & Stocks to Consider
Silgan Holdings currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Graham Corporation GHM, Federal Signal Corporation FSS and RBC Bearings Incorporated RBC. GHM sports Zacks Rank #1 (Strong Buy), and FSS and RBC have a Zacks Rank #2 (Buy) each at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Graham has an average trailing four-quarter earnings surprise of 101.85%. The Zacks Consensus Estimate for GHM’s 2024 earnings is pinned at $1.03 per share, which indicates year-over-year growth of 145.2%. The company’s shares have gained 136.8% in a year.
Federal Signal has an average trailing four-quarter earnings surprise of 11.8%. The Zacks Consensus Estimate for FSS’ 2024 earnings is pinned at $3.34 per share, which indicates year-over-year growth of 29.5%. The company’s shares have gained 40% in a year.
The Zacks Consensus Estimate for RBC Bearings’ fiscal 2025 earnings is pegged at $9.80 per share. The company has a trailing four-quarter average earnings surprise of 2.5%. RBC shares have gained 37.5% in a year.
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Graham Corporation (GHM) : Free Stock Analysis Report
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