On Wednesday, RBC Capital Markets updated its outlook on Crown Holdings (NYSE:CCK), increasing the price target to $113.00 from $105.00 while maintaining an Outperform rating on the stock.
The firm highlighted the company's continued above-market volume growth as a key driver for the revised target. Crown Holdings has experienced shipment increases of over 5% in Brazil, Europe, Mexico, and the United States, contributing to a higher forecast for fiscal year 2024.
The analyst noted that while Crown Holdings may not sustain mid-single-digit percentage volume growth into fiscal year 2025, it is expected to perform in line with market growth, which is anticipated to be in the low-single-digit percentage range.
The company's effective operations management was cited as a foundational strength that positions it well to capitalize on higher earnings levels and potential growth in fiscal year 2025.
In response to the company's third-quarter performance, RBC Capital has raised its fiscal year 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate to $1.916 billion, up from $1.89 billion. Moreover, the firm has increased its earnings per share (EPS) forecast for the same period to $6.30, an improvement from the previous estimate of $6.15.
Despite a slight downward revision of the fiscal year 2025 EBITDA estimate to $1.975 billion from $1.985 billion, RBC Capital's price target adjustment reflects a higher valuation multiple of 10 times the fiscal year 2025 earnings, up from 9.5 times. This adjustment speaks to the firm's confidence in Crown Holdings' earnings trajectory and market position.
In other recent news, Crown Holdings has been the focus of multiple financial analysts following its robust third-quarter earnings. The company reported an earnings per share (EPS) of $1.99, surpassing both Loop Capital's estimate of $1.79 and the market consensus of $1.81. Crown Holdings' consolidated revenues for the quarter were $3.07 billion, exceeding Loop Capital's estimate of $2.97 billion.
Following these results, Loop Capital increased its price target on Crown Holdings from $120 to $129, maintaining a Buy rating. Similarly, Jefferies has upgraded its price target from $120 to $125, also maintaining a Buy rating. Both firms highlight Crown Holdings' strong execution and the potential for consistent earnings growth.
In recent developments, Crown Holdings reported a GAAP loss of $1.47 per share due to a non-cash pension settlement charge, while its adjusted earnings per diluted share rose by 15% to $1.99. The company also authorized a $2 billion stock repurchase plan, with $110 million repurchased in the quarter.
For the fourth quarter, Crown Holdings projects adjusted earnings per share between $1.45 and $1.55, and increased its full-year guidance to $6.25 to $6.35 per share. These developments underline Crown Holdings' commitment to operational efficiency and market growth opportunities.
InvestingPro Insights
To complement RBC Capital Markets' positive outlook on Crown Holdings (NYSE:CCK), recent data from InvestingPro provides additional context to the company's financial position and market performance.
Crown Holdings currently boasts a market capitalization of $11.37 billion, reflecting its significant presence in the packaging industry. The company's stock has shown strong momentum, with a 26.39% total return over the past year and is currently trading near its 52-week high, at 97.67% of that peak.
InvestingPro Tips highlight that Crown Holdings has raised its dividend for three consecutive years, demonstrating a commitment to shareholder returns. This aligns with the company's solid financial performance noted in the RBC Capital report. Moreover, analysts predict that Crown Holdings will remain profitable this year, supporting the optimistic earnings forecasts.
For investors seeking a deeper understanding of Crown Holdings' potential, InvestingPro offers 7 additional tips that could provide valuable insights into the company's financial health and market position. These tips, along with real-time metrics, can help investors make more informed decisions in line with RBC Capital's bullish stance on the stock.
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