AptarGroup (ATR) Hits 52-Week High on Strong Prospects
Shares of AptarGroup, Inc. ATR reached a new 52-week high of $70.70 on Oct 9 and eventually closed trading marginally lower at $70.26. The company’s share price has been persistently rising since it reported strong second-quarter earnings.
AptarGroup has delivered a year-to-date return of about 5.12%. Average volume of shares traded over the last 3 months is approximately 303K.
This Crystal Lake, IL-based leading global supplier of wide range of innovative dispensing systems for the fragrance/cosmetic, personal care, pharmaceutical, household and food/beverage markets has a market cap of $4.41 billion and long-term estimated earnings per share growth rate of 9.33%. The company has surpassed the Zacks Consensus Estimate in all of the trailing four quarters with an average surprise of 8.97%.
Drivers
Shares of AptarGroup started gaining since Jul 30, after it reported record second-quarter 2015 adjusted earnings of 90 cents per share, which surpassed the company’s guidance of 66 cents and also beat the Zacks Consensus Estimate of 75 cents. Moreover, the reported figure improved 32% year over year, despite an 11% year-over-year dip in revenues. Increase in demand across multiple markets drove volumes higher in Pharma and Food + Beverage segments, offset by weakness in the Beauty + Home segment. In addition, currency headwinds affected each business segment.
The company has implemented a series of measures to improve its profitability in the Beauty + Home business, including cost reduction and adjusting its management structure in North America. The company expects to achieve roughly $10 million in savings in 2015.
For the third quarter of 2015, AptarGroup expects adjusted earnings to be approximately 65 cents per share and reported earnings in the range of 77 cents to 82 cents per share. The company anticipates that organic sales growth, cost savings and a relatively benign commodity cost environment will help offset unfavorable foreign exchange and soft demand in some end-markets, driving 18% to 26% year-over-year increase in the third quarter. AptarGroup’s fundamental drivers - innovation, broad product diversification, expansive geographic reach, differentiated operating capabilities, and a strong financial position remain intact.
The Zacks Consensus Estimate for the third quarter is pegged at 78 cents, reflecting 5.86% year-over-year growth. In fact, the consensus estimate has risen 10% from 71 cents per share to 78 cents per share in the past 90 days.
At present, AptarGroup has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the sector include UFP Technologies, Inc. UFPT, Berry Plastics Group, Inc. BERY and Graphic Packaging Holding Company GPK. While UFP Technologies and Berry Plastics sport a Zacks Rank #1 (Strong Buy), Graphic Packaging holds a Zacks Rank 2 (Buy).
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