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Category: Stock Market and Ball Corporation
Date: 7 May 2020 Stock Price: $66.44 We take a look at the 1st quarter 2020 earnings report of Ball Corporation a supplier of packaging for beverages, personal care and household products.
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About Ball Corporation
Ball Corporation supplies innovative, sustainable packaging solutions for beverage, personal care and household products customers, as well as aerospace and other technologies and services primarily for the U.S. government. Ball Corporation and its subsidiaries employ more than 18,300 people worldwide and reported 2019 net sales of $11.5 billion.
Overview of Ball Corporation 1st quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise
- Net sales: $2.785 billion (unchanged from $2.785 billion for the same quarter of the previous year)
- Net sales was unchanged over the last 12 months
- Cost of sales: $2.215 billion (down from $2.253 billion for the same quarter of the previous year)
- Cost of sales increased by 1.7% over the last 12 months
- So some margin squeeze for Ball Corporation, as their net sales didn't grow yet their cost of sales increased
- Net income of Ball Corporation: $23 million (down from $117 million for the same quarter of the previous year)
- Diluted earnings per share: $0.07 (down from $0.34 for the same quarter of the previous year)
- PE ratio of Ball Corporation : 48.9
- Diluted number of shares in issue: 332.326 million (down from 342.676 million for the same quarter of the previous year)
- Cash and cash equivalents: $801 million
- Cash and equivalents per share: $2.41
- Cash and cash equivalents makes up 3.6% of Ball Corporation' market capital
- Cash and cash equivalents makes up 4.84% of Ball Corporation' total assets
- Inventories of Ball Corporation: $1.354 billion
- Inventores makes up 8.2% of Ball Corporation' total assets
- Goodwill of Ball Corporation: $4.270 billion
- Goodwill per share: $12.85
- Goodwill makes up 25.8% of Ball Corporation' total assets
- Stockholders equity in Ball Corporation: $2.7 billion
- Stockholders equity per share: $8.12
- So Ball Corporation is trading at 8.2 times its stockholders equity which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For perspective the average price to book value of firms in the S&P 500 is 3.34 times. Read more about the S&P 500 here
Ball Corporation' management commentary on their 1st quarter 2020 earnings
BROOMFIELD, Colo., May 7, 2020 /PRNewswire/ -- Ball Corporation (NYSE: BLL) today reported, on a U.S. GAAP basis, first quarter 2020 net earnings attributable to the corporation of $23 million (including net after-tax charges of $179 million, or 54 cents per diluted share for business consolidation, debt refinancing and other non-comparable costs) or 7 cents per diluted share, on sales of $2.8 billion, compared to $117 million net earnings attributable to the corporation, or 34 cents per diluted share (including net after-tax charges of $50 million, or 15 cents per diluted share for business consolidation, debt refinancing and other non-comparable costs), on sales of $2.8 billion in 2019. Ball's first quarter 2020 comparable net earnings were $202 million, or 61 cents per diluted share versus first quarter 2019 comparable net earnings of $167 million or 49 cents per diluted share.
"First and foremost, we extend our gratitude to our front-line manufacturing teams, our supply chain and our customers for their dedication to working safely and maintaining a reliable supply of packaging, aerospace technologies and services to our customers and consumers. Ball is fortunate to have a strong balance sheet, ample liquidity, a "can-do" culture and a business model that has successfully weathered other turbulent economic times over our 140-year history. Our company is humbled by the resiliency with which we are able to execute our strategy, maintain employment across global economies and give back to the communities where we operate," said John A. Hayes, chairman, president and chief executive officer.
"First and foremost, we extend our gratitude to our front-line manufacturing teams, our supply chain and our customers for their dedication to working safely and maintaining a reliable supply of packaging, aerospace technologies and services to our customers and consumers. Ball is fortunate to have a strong balance sheet, ample liquidity, a "can-do" culture and a business model that has successfully weathered other turbulent economic times over our 140-year history. Our company is humbled by the resiliency with which we are able to execute our strategy, maintain employment across global economies and give back to the communities where we operate," said John A. Hayes, chairman, president and chief executive officer.
"During the quarter, our company posted 24 percent comparable earnings per diluted share growth and 12 percent operating earnings growth across our corporation. Our global beverage business' comparable operating earnings grew 5 percent despite meaningful volume declines in South America during the second half of March, our aluminum aerosol business grew operating earnings 5 percent, and our aerospace business earnings increased 33 percent. With customer and consumer demand for aluminum packaging solutions continuing to outpace existing supply in North America, and our aerospace business supporting critical missions for the U.S. government, our previously announced growth projects are largely on track to add much needed capacity throughout 2020 and beyond."
"Our global business is resilient and, though certain regions may be impacted more significantly during the second quarter due to the socioeconomic dynamics associated with the pandemic, the long-term demand for our products continues to be strong and our strategy remains intact. We are focused on working safely, improving our operational excellence, amplifying the sustainability benefits of aluminum packaging, and executing on previously announced growth projects. Ball remains well positioned to grow diluted earnings per share, and deliver shareholder returns now and into the future."
"Our global business is resilient and, though certain regions may be impacted more significantly during the second quarter due to the socioeconomic dynamics associated with the pandemic, the long-term demand for our products continues to be strong and our strategy remains intact. We are focused on working safely, improving our operational excellence, amplifying the sustainability benefits of aluminum packaging, and executing on previously announced growth projects. Ball remains well positioned to grow diluted earnings per share, and deliver shareholder returns now and into the future."
Ball Corporation (NYSE:BLL) stock price history
The image below obtained from Google, shows Ball Corporation stock price for the last 5 years. And it's been a very good time for Ball Corporation stockholders. 5 years ago the stock of Ball Corporation was trading around $36 a stock and its currently trading at $34.81. That's a strong return of 84.5% provided to Ball Corporation stockholders over the last 5 years.
The stock of Ball Corporation is trading a lot close to the midpoint between its 52 week high and 52 week low which to us is a clear indication that the short term sentiment and momentum of Ball Corporation's stock is neutral at this point in time.
The stock of Ball Corporation is trading a lot close to the midpoint between its 52 week high and 52 week low which to us is a clear indication that the short term sentiment and momentum of Ball Corporation's stock is neutral at this point in time.
Bio-Rad Laboratories (NYSE:BIO) stock price history over the last 5 years
Recent Google search trends for BLL stock price
The graphic below shows the trend in Google searches BLL stock price over the last 12 months in the United States as obtained from Google Trends. The searches for BLL stock price is fairly erratic and not very consistent over time.
Recent coverage of Ball Corporation
The extract below covers the latest earnings report from Ball Corporation as obtained from DBTnews.com
Here’s what leading stock market gurus have to say about Ball Corporation [BLL]:Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for BLL shares is $80.27 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on BLL stock is a recommendation set at 2.10. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.
Goldman have made an estimate for Ball Corporation shares, keeping their opinion on the stock as Buy, with their previous recommendation back on March 24, 2020. The new note on the price target was released on December 02, 2019, representing the official price target for Ball Corporation stock.
The Average True Range (ATR) for Ball Corporation is set at 2.55, with the Price to Sales ratio for BLL stock in the period of the last 12 months amounting to 1.87. The Price to Book ratio for the last quarter was 7.27, with the Price to Cash per share for the same quarter was set at 5.52. Price to Free Cash Flow for BLL in the course of the last twelve months was 27.87 with Quick ratio for the last quarter at 0.60.
Read the full article here
Here’s what leading stock market gurus have to say about Ball Corporation [BLL]:Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for BLL shares is $80.27 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on BLL stock is a recommendation set at 2.10. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.
Goldman have made an estimate for Ball Corporation shares, keeping their opinion on the stock as Buy, with their previous recommendation back on March 24, 2020. The new note on the price target was released on December 02, 2019, representing the official price target for Ball Corporation stock.
The Average True Range (ATR) for Ball Corporation is set at 2.55, with the Price to Sales ratio for BLL stock in the period of the last 12 months amounting to 1.87. The Price to Book ratio for the last quarter was 7.27, with the Price to Cash per share for the same quarter was set at 5.52. Price to Free Cash Flow for BLL in the course of the last twelve months was 27.87 with Quick ratio for the last quarter at 0.60.
Read the full article here
Inside a laboratory
Ball Corporation (NYSE: BLL) stock valuation
So based on Ball Corporation 1st quarter 2020 earnings report what do we value Ball Corporation stock at? Based on their earnings reported our valuation model provides a target price (full value price) for Ball Corporation at $46.30 a stock
We therefore believe that the stock of Ball Corporation is overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $46.30. A good entry price into Ball Corporation would therefore be at $41.70 or below.
Since the stock of Ball Corporation is trading at well above our suggested entry point we rate the stock a sell and expect it to pull back to levels closer to our target price in coming weeks and months
We therefore believe that the stock of Ball Corporation is overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $46.30. A good entry price into Ball Corporation would therefore be at $41.70 or below.
Since the stock of Ball Corporation is trading at well above our suggested entry point we rate the stock a sell and expect it to pull back to levels closer to our target price in coming weeks and months
Next earnings release of Ball Corporation
Ball Corporation is expected to release their 2nd quarter 2020 earnings report in early August 2020