On Monday, Stifel adjusted its outlook on Disc Medicine (NASDAQ: IRON), reducing the stock's price target from $104.00 to $71.00 while still recommending a Buy. The firm's analysis indicates an increased confidence in the company's earnings growth, despite a recent divestiture.
The revision reflects a new 12-month stock price target of $78, which is 22.9 times Stifel's estimated earnings per share (EPS) for 2024. This target is set at a premium compared to Ball Corporation's (NYSE: NYSE:BALL) historical average forward price-to-earnings (P/E) ratio of 19.6 times, justified by a resurgence in demand for aluminum cans after a period of inventory reduction.
Stifel has also raised its EPS estimates for Ball Corporation, increasing the 2024 forecast by $0.14 to $3.40 and the 2025 projection by $0.19 to $3.85. The adjustment comes with a stronger conviction in Ball's potential for earnings growth, anticipating that the negative impact from the sale of its aerospace division will be counterbalanced by share repurchases and reduced interest expenses.
Ball Corporation plans to allocate approximately $2 billion from the aerospace business sale towards debt reduction and another $2 billion for a share buyback initiative.
This strategic focus on the core beverage-can segment is expected to enhance Ball's free cash flow, with capital expenditures projected to decrease to around $600 million in 2024 and 2025, a significant drop from $1 billion in 2023 and $1.7 billion in the preceding two years.
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