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Category: Stock Market and Crown Holdings
Date: 21 April 2020 Stock Price: $60.04 We take a look at the earnings report for the 1st quarter of their 2020 fiscal year of Crown Holdings, a supplier of rigid packaging products to consumer marketing companies.
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About Crown Holdings
Crown Holdings, Inc., through its subsidiaries, is a leading global supplier of rigid packaging products to consumer marketing companies, as well as transit and protective packaging products, equipment and services to a broad range of end markets. World headquarters are located in Yardley, Pennsylvania.
Overview of Crown Holdings' 1st quarter 2020 earnings report
The numbers below refers to the latest quarter unless specified otherwise
- Net sales: $2.727 billion (down from $2.755 billion for the same quarter of the previous year)
- Net sales decreased by -1% over the last 12 months
- Cost of products sold: $2.220 billion (up from $2.210 billion for the same quarter of the previous year)
- Cost of products sold increased by 0.45% over the last 12 months
- Net Income: $114 million (down from $131 million for the same quarter of the previous year)
- Diluted earnings per share: $0.65 (up from $0.77 for the same quarter of the previous year)
- PE ratio of Crown Holdings': 27.8
- Dividend declared: $0.7459
- Dividend yield of Crown Holdings': 2.4%
- Weighted average number of shares - diluted: 2.613 billion (up from 2.637 billion for the same quarter of the previous year)
- Cash and cash equivalents: $15.393 billion
- Cash and cash equivalents per share: $5.89
- Cash and cash equivalents makes up 4.7% of Crown Holdings' market capital
- Cash and cash equivalents makes up 12.9% of Crown Holdings' total assets
- Inventories: $5.330 billion
- Inventories makes up 4.49% of Crown Holdings's total assets
- Crown Holdings inventories increased by 6.2% over the last 12 months
- Goodwill: $39.671 billion
- Goodwill per share: $15.18
- So essentially 12.2% of Crown Holdings' stock price is made up by goodwill
- Goodwill makes up 35.4% of Crown Holdings' total assets
- Basically the group is saying that their brand names are worth $39.617 billion, or $15.18 per share
- Stockholders' equity in Crown Holdings : $45.941 billion
- Stockholders equity per share: $17.58
- So Crown Holdings is trading at 7.1 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For perspective the S&P 500 is trading at a book value of 3.34. Read more about the S&P500 here.
Crown Holdings' management commentary on their 1st quarter 2020 earnings report
YARDLEY, Pa., April 20, 2020 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the first quarter ended March 31, 2020.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "The Company performed well during the first quarter in the face of the emerging coronavirus pandemic. Global beverage can shipments advanced 10% in the quarter, led by double-digit gains in Brazil, Canada, Europe, the Middle East and the United States, as consumers increasingly prefer cans for off-premise refreshment occasions. Solid global food can volume reflected a notable increase in North American shipments.
"I would like to thank all of our employees and partners, whose dedication and commitment continue to be instrumental as we navigate through this unprecedented situation. Crown has taken a number of specific actions, including increased safety measures at our manufacturing facilities to ensure that they can continue to meet evolving requirements in a safe and timely manner. The health and safety of our employees, customers and partners is our highest priority.
"Crown's products are a crucial part of food and beverage supply chains and also provide critical support to the transportation industry. While our first quarter performance was strong, the uncertainty surrounding the impact and duration of the coronavirus pandemic precludes the Company from putting forth projections regarding future financial performance. The management team will continue to focus on employee safety and meeting customer demand while prudently managing our cost structure and ensuring liquidity as a key element of our near-term capital allocation program.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "The Company performed well during the first quarter in the face of the emerging coronavirus pandemic. Global beverage can shipments advanced 10% in the quarter, led by double-digit gains in Brazil, Canada, Europe, the Middle East and the United States, as consumers increasingly prefer cans for off-premise refreshment occasions. Solid global food can volume reflected a notable increase in North American shipments.
"I would like to thank all of our employees and partners, whose dedication and commitment continue to be instrumental as we navigate through this unprecedented situation. Crown has taken a number of specific actions, including increased safety measures at our manufacturing facilities to ensure that they can continue to meet evolving requirements in a safe and timely manner. The health and safety of our employees, customers and partners is our highest priority.
"Crown's products are a crucial part of food and beverage supply chains and also provide critical support to the transportation industry. While our first quarter performance was strong, the uncertainty surrounding the impact and duration of the coronavirus pandemic precludes the Company from putting forth projections regarding future financial performance. The management team will continue to focus on employee safety and meeting customer demand while prudently managing our cost structure and ensuring liquidity as a key element of our near-term capital allocation program.
Outlook
Given the uncertainty of the impact and duration of the coronavirus pandemic, the Company has withdrawn its previous guidance for 2020. The dynamic nature of the situation makes it difficult for management to estimate projected performance of its businesses at this time, particularly over the near term.
In direct response to the pandemic, the Company has taken specific actions to ensure the safety of its employees. Following the implementation of travel and visitor restrictions in February, Crown continues to update its policies as new information becomes available. The Company has taken increased safety measures in its manufacturing facilities to ensure the safety of its employees and the products they produce. In addition, as many Crown employees as possible are working remotely.
The Company's products are a vital part of the support system to its customers and consumers. In addition to manufacturing containers that provide protection for food and beverages, Crown also produces closures for baby food, aerosol containers for cleaning and sanitizing products and numerous products that provide for the safe and secure transportation of goods in transit.
The Company is working to ensure that its 239 manufacturing facilities around the world remain operational and are equipped with the resources required to meet continually evolving customer demand by delivering high quality products in a safe and timely manner. Crown is actively monitoring and managing supply chain challenges, including coordinating with the Company's suppliers to identify and mitigate potential areas of risk and manage inventories.
The Company's previously announced Board-led strategic review is ongoing and a further update will be provided in due course.
Given the uncertainty of the impact and duration of the coronavirus pandemic, the Company has withdrawn its previous guidance for 2020. The dynamic nature of the situation makes it difficult for management to estimate projected performance of its businesses at this time, particularly over the near term.
In direct response to the pandemic, the Company has taken specific actions to ensure the safety of its employees. Following the implementation of travel and visitor restrictions in February, Crown continues to update its policies as new information becomes available. The Company has taken increased safety measures in its manufacturing facilities to ensure the safety of its employees and the products they produce. In addition, as many Crown employees as possible are working remotely.
The Company's products are a vital part of the support system to its customers and consumers. In addition to manufacturing containers that provide protection for food and beverages, Crown also produces closures for baby food, aerosol containers for cleaning and sanitizing products and numerous products that provide for the safe and secure transportation of goods in transit.
The Company is working to ensure that its 239 manufacturing facilities around the world remain operational and are equipped with the resources required to meet continually evolving customer demand by delivering high quality products in a safe and timely manner. Crown is actively monitoring and managing supply chain challenges, including coordinating with the Company's suppliers to identify and mitigate potential areas of risk and manage inventories.
The Company's previously announced Board-led strategic review is ongoing and a further update will be provided in due course.
Crown Holdings (NYSE: CCK) stock price history
The image below obtained from Google shows the stock price history of Procter & Gamble (NYSE: PG) for the last 5 years. 5 years ago the stock of Crown Holdings was trading at around $55.30 and its currently trading at $60.04 a stock. That's a return of 8.6% provided to Crown Holdings stockholders over the last 5 years.
The stock of Crown Holdings is trading at a lot closer to its 52 week low of $42.97 than it is to its 52 week high of $80.56 which to us is a clear indication that the short term sentiment and momentum of Crown Holdings is negative at this point in time. It is not surprising considering the fact that markets sold off significantly during March 2020 due to the Covid-19 pandemic and the impact its having on global growth.
The stock of Crown Holdings is trading at a lot closer to its 52 week low of $42.97 than it is to its 52 week high of $80.56 which to us is a clear indication that the short term sentiment and momentum of Crown Holdings is negative at this point in time. It is not surprising considering the fact that markets sold off significantly during March 2020 due to the Covid-19 pandemic and the impact its having on global growth.
Recent coverage of Crown Holdings
The extract regarding the latest earnings report from Crown Holdings was obtained from TheStreet.com
Crown Holdings, Inc. (NYSE:CCK) went down by -2.58% from its latest closing price when compared to the 1-year high value of $80.57 and move down -31.48%, while CCK stocks collected +0.36% of gains with the last five trading sessions. Press Release reported 9 hours ago that Crown Holdings, Inc. Reports First Quarter 2020 Results
Crown Holdings, Inc. (NYSE:CCK) Worth an Investment?Crown Holdings, Inc. (NYSE: CCK) scored price to earnings ratio above its average ratio, recording 16.20 times of increase in earnings at the present.
CCK Market Performance
CCK stocks went up by 0.36% for the week, with the monthly jump of 21.64% and a quarterly performance of -16.56%, while its annual performance rate touched 8.59%. The simple moving average for the period of the last 20 days is 7.90% for CCK stocks with the simple moving average of -9.63% for the last 200 days.
Analysts’ Opinion on Crown Holdings, Inc. (NYSE:CCK)
Many brokerage firms have already submitted their reports for CCK stocks, with Goldman repeating the rating for CCK shares by setting it to “Buy”. The predicted price for CCK socks in the upcoming period according to Goldman is $61 based on the research report published on March 24, 2020. Morgan Stanley, on the other hand, stated in their research note that they expect to see CCK stock at the price of $61. The rating they have provided for CCK stocks is “Equal-Weight” according to the report published on January 17, 2019.
Crown Holdings, Inc. (NYSE:CCK) went down by -2.58% from its latest closing price when compared to the 1-year high value of $80.57 and move down -31.48%, while CCK stocks collected +0.36% of gains with the last five trading sessions. Press Release reported 9 hours ago that Crown Holdings, Inc. Reports First Quarter 2020 Results
Crown Holdings, Inc. (NYSE:CCK) Worth an Investment?Crown Holdings, Inc. (NYSE: CCK) scored price to earnings ratio above its average ratio, recording 16.20 times of increase in earnings at the present.
CCK Market Performance
CCK stocks went up by 0.36% for the week, with the monthly jump of 21.64% and a quarterly performance of -16.56%, while its annual performance rate touched 8.59%. The simple moving average for the period of the last 20 days is 7.90% for CCK stocks with the simple moving average of -9.63% for the last 200 days.
Analysts’ Opinion on Crown Holdings, Inc. (NYSE:CCK)
Many brokerage firms have already submitted their reports for CCK stocks, with Goldman repeating the rating for CCK shares by setting it to “Buy”. The predicted price for CCK socks in the upcoming period according to Goldman is $61 based on the research report published on March 24, 2020. Morgan Stanley, on the other hand, stated in their research note that they expect to see CCK stock at the price of $61. The rating they have provided for CCK stocks is “Equal-Weight” according to the report published on January 17, 2019.
Crown Holdings (NYSE: CCK) stock valuation
Based on Crown Holdings latest earnings report what do we value their stock at? Based on Crown Holdings earnings reported our valuation model provides a target price (full value price) at $52.10 per Crown Holdings stock. We therefore believe that the stock of Crown Holdings is overvalued.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $52.10. We therefore believe a good entry point into Crown Holdings stock is at $46.90 or below. We expect the stock price of Crown Holdings to pull back in coming weeks and months to levels closer to our target price (full value price) of $52.10
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $52.10. We therefore believe a good entry point into Crown Holdings stock is at $46.90 or below. We expect the stock price of Crown Holdings to pull back in coming weeks and months to levels closer to our target price (full value price) of $52.10
Next earnings release of Crown Holdings
It is expected that Crown Holdings will release their Q2 2020 earnings report in late July 2020