TAMPA - Crown Holdings, Inc. (NYSE: NYSE:CCK), a global leader in rigid packaging products, has announced a stock repurchase program authorizing the buyback of up to $2 billion of its shares by the end of 2027. This new plan replaces the previous repurchase authorization declared on December 9, 2021.
Timothy J. Donahue, Chairman, President and CEO of Crown Holdings, emphasized that share repurchases are a key component of the company’s capital allocation strategy. He reaffirmed the company's commitment to disciplined capital management, including investing in growth, returning capital to shareholders, and reducing debt to achieve a net leverage ratio of 2.5 times.
The repurchase of shares under this program is subject to market conditions and may be conducted on the open market or through privately negotiated transactions. Management will decide the timing and number of shares to be repurchased based on various factors, including stock price, corporate and regulatory requirements, and other market conditions.
Crown Holdings, Inc. delivered a strong second-quarter performance, surpassing expectations with a significant rise in net sales and earnings per share. The company's earnings per diluted share rose from $1.31 to $1.45, while net sales reached $3 billion, driven by a 6% increase in global beverage can volumes. RBC Capital Markets, Truist Securities, Loop Capital, and Citi have all adjusted their price targets for Crown Holdings, reflecting the company's recent performance and updated guidance.
RBC Capital anticipates that Crown Holdings will generate significant free cash flow, over $750 million, in fiscal year 2024. This financial capacity is expected to support the company's strategies for debt reduction and share repurchase initiatives. Crown Holdings has raised its full-year EPS guidance to a range of $6.00 to $6.25, suggesting a year-over-year growth of approximately 4.6%.
InvestingPro Insights
In light of Crown Holdings, Inc.'s recent announcement regarding its stock repurchase program, a glance at the company's financial metrics and market performance offers valuable context. According to InvestingPro data, Crown Holdings currently holds a market capitalization of approximately $10.23 billion, with a Price/Earnings (P/E) ratio of 23.82, which adjusts down to 20.27 for the last twelve months as of Q2 2024. This suggests a company with a solid earnings base relative to its share price.
InvestingPro Tips indicate that Crown Holdings has raised its dividend for three consecutive years, signaling a commitment to returning value to shareholders—a strategy that aligns with the newly announced repurchase program. Additionally, the company's stock has shown a significant return over the last week with a 10.61% price total return, and over the last month with a 15.18% return, reflecting a strong recent market performance.
For investors seeking further insights and analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/CCK. These tips can provide a deeper understanding of Crown Holdings' market position and future potential. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering access to a broader range of expert financial analysis and tips.
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