On Monday, Loop Capital adjusted its financial outlook on Crown Holdings (NYSE:CCK) shares, a leading supplier of packaging products to consumer marketing companies, increasing the price target to $129 from $120 and maintaining a Buy rating on the stock. This revision follows Crown Holdings' third-quarter earnings, which surpassed analysts' expectations.
Crown Holdings reported a significant earnings per share (EPS) beat for the third quarter of 2024, with an adjusted EPS of $1.99. This figure outperformed Loop Capital's estimate of $1.79, the consensus of $1.81, and the company's own guidance range of $1.75 to $1.85. The company's consolidated revenues for the quarter reached $3.07 billion, which was above Loop Capital's estimate of $2.97 billion and aligned with the market consensus.
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter were reported at $545 million, exceeding both Loop Capital's projection of $509 million and the consensus of $523 million. These robust financial results were attributed to better-than-expected volumes in North America and Europe during the third quarter.
Loop Capital's revised price target is based on a 10x multiple of its updated 2025 enterprise value to EBITDA (EV/EBITDA) estimate for Crown Holdings. The firm reiterated its Buy rating, signaling confidence in the company's continued performance and growth prospects.
Crown Holdings' strong quarterly performance and the subsequent price target upgrade by Loop Capital highlight the company's solid financial standing and its ability to exceed market and analyst expectations.
In other recent news, Crown Holdings has been the subject of an upgraded price target by Jefferies, from $120 to $125, maintaining a Buy rating. This adjustment is driven by the company's strong execution and its ability to sustain a solid free cash flow, based on its recent investments.
Crown Holdings has also been recognized for its potential for consistent earnings per share growth, with an estimated 10% compound annual growth rate, according to Jefferies.
In addition to the positive outlook from Jefferies, Crown Holdings reported stable Q3 2024 financial results. The company saw net sales of $3.1 billion and an increase in segment income to $472 million, up from $430 million from the previous year. This growth was primarily driven by higher beverage can volumes in the Americas and Europe.
The company also reported a GAAP loss of $1.47 per share due to a non-cash pension settlement charge. However, adjusted earnings per diluted share rose by 15% to $1.99. Crown Holdings has generated a robust free cash flow of $668 million year-to-date, reducing its net leverage ratio to 3 times.
The Board authorized a $2 billion stock repurchase plan, with $110 million repurchased in the quarter. For the fourth quarter, the company 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 recent developments highlight Crown Holdings' commitment to operational efficiency and market growth opportunities.
InvestingPro Insights
Crown Holdings' recent performance aligns with several key metrics and insights from InvestingPro. The company's stock is currently trading near its 52-week high, with a strong return of 26.36% over the last three months. This upward trend is consistent with Loop Capital's bullish outlook and increased price target.
InvestingPro data shows that Crown Holdings has a market capitalization of $11.55 billion and an adjusted P/E ratio of 39.92 for the last twelve months as of Q3 2024. The company's revenue for the same period stands at $11.76 billion, with an EBITDA growth of 6.85%, reflecting its solid financial performance.
Two notable InvestingPro Tips for Crown Holdings are particularly relevant to the article:
1. Management has been aggressively buying back shares, which often signals confidence in the company's future prospects.
2. The company has raised its dividend for 3 consecutive years, indicating a commitment to returning value to shareholders.
These insights complement the positive earnings report and Loop Capital's upgraded outlook. Investors seeking more comprehensive analysis can find an additional 9 tips on InvestingPro, providing a deeper understanding of Crown Holdings' financial health and market position.
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