On Monday, Mizuho updated its financial outlook on Ball Corp (NYSE:BALL), raising the price target to $69.00 from the previous $63.00. The firm kept its Neutral rating on the stock.
Ball Corp, known for its beverage can manufacturing, reported adjusted EBIT for the first quarter of 2024 at $332 million compared to $281 million and $269 million, as estimated by MSUSA and Bloomberg consensus, respectively. This represents an 8% year-over-year increase, driven by a 3.7% rise in global volume, cost savings, and improved efficiency. A notable factor in the volume increase was a customer pull forward in North America.
Ball Corp also completed the sale of its Aerospace unit to BAE Systems (LON:BAES) on February 19, 2024. The proceeds from this transaction have been used to pay down debt, totaling $2.8 billion, and to repurchase approximately $350 million in shares. Despite the divestiture, the company expects the move to be earnings per share (EPS) neutral. Ball Corp projects mid-single-digit earnings growth for 2024, with an anticipated EPS of around $3.10.
The company also plans to continue generating robust free cash flow throughout 2024. As part of its capital allocation strategy, Ball Corp intends to repurchase approximately $1.3 billion of its shares during the year. The revised price target of $69 reflects the positive financial performance and strategic initiatives undertaken by the company.
InvestingPro Insights
Based on the latest metrics from InvestingPro, Ball Corp (NYSE:BALL) is currently showcasing a strong financial position. The company's market capitalization stands at an adjusted $21.97 billion, with a Price/Earnings (P/E) ratio of 33.56, which slightly adjusts to 32.35 when looking at the last twelve months as of Q1 2024. This indicates a high earnings multiple, which may reflect investor confidence in the company's future earnings potential.
InvestingPro Tips suggest that Ball Corp maintains a high shareholder yield and has consistently paid dividends for 52 consecutive years, which may appeal to income-focused investors. The company is also trading near its 52-week high, with a price that's 98.73% of this peak, and has experienced a significant price uptick over the last six months, with a 49.34% total return.
These financial indicators are complemented by a robust 3-month price total return of 22.85%, reinforcing the positive outlook on the stock's recent performance. Additionally, analysts predict that Ball Corp will be profitable this year, with the company having been profitable over the last twelve months.
For those interested in further analysis and additional InvestingPro Tips, there are 6 more tips available for Ball Corp, which can be accessed by visiting: https://www.investing.com/pro/BALL. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes these valuable insights.
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