Berry Global (BERY) Gains 12.9% in a Year: Will the Trend Last?
Berry Global Group, Inc. BERY appears in good shape, with its shares having rallied approximately 13% in the past year against the industry’s 3.7% decrease.
What’s Aiding BERY?
Berry Global’s diversified business structure allows it to mitigate the weakness in one end market with strength across the others. Also, the company’s cost-reduction actions, including site rationalizations, moving business to more cost-efficient facilities and labor cost reductions, are supporting its bottom line. In fiscal 2023 (ended September 2023), BERY’s cost of sales declined 14.6% year over year. The company expects the cost-reduction initiatives to provide annualized cost savings of $140 million in fiscal 2023 & fiscal 2024 (ending September 2024).
The company’s expansion initiative is expected to drive growth. Berry Global acquired Pro-Western Plastics in June 2023. The buyout boosted BERY’s container business in North America, particularly in the dairy, industrial and medical sectors.
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BERY continues to increase shareholders’ value through share repurchases. In fiscal 2023, the company paid dividends worth $127 million and bought back shares worth $600 million. In November 2023, the company hiked its dividend by 10% to 27.50 cents per share (annually: $1.10). In February 2022, Berry Global announced a $1 billion share buyback program, which is expected to remain operational over the next two to three fiscal years.
Will the Uptrend in Shares Last?
In the quarters ahead, strategic investments in high-growth end markets, such as food service, health and beauty, dispensing and pharmaceuticals, will be beneficial for the company. Also, the focus on improving operational productivity and partnerships across the value chain is likely to continue improving BERY’s margins and its financial performance in the quarters ahead.
Zacks Rank & Stocks to Consider
Berry Global currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation FLS presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 3.1%. The stock has risen 24% in the past year.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 13.9%.
The consensus estimate for AIT’s fiscal 2024 earnings has increased 3.7% in the past 60 days. Shares of Applied Industrial have jumped 26.6% in the past year.
A. O. Smith Corporation AOS currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 5%. The stock has risen 27.2% in the past year.
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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Flowserve Corporation (FLS) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Berry Global Group, Inc. (BERY) : Free Stock Analysis Report
