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Have you been paying attention to shares of Crown Holdings (CCK)? Shares have been on the move with the stock up 17.2% over the past month. The stock hit a new 52-week high of $90.22 in the previous session. Crown Holdings has gained 19.9% since the start of the year compared to the 8.6% move for the Zacks Industrial Products sector and the 34% return for the Zacks Containers - Metal and Glass industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 19, 2020, Crown reported EPS of $1.96 versus consensus estimate of $1.6 while it beat the consensus revenue estimate by 3.49%.
For the current fiscal year, Crown is expected to post earnings of $5.2 per share on $11.34 billion in revenues. This represents a 1.76% change in EPS on a -2.78% change in revenues. For the next fiscal year, the company is expected to earn $5.72 per share on $11.93 billion in revenues. This represents a year-over-year change of 10.19% and 5.17%, respectively.
Crown may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Crown has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 16.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.8X versus its peer group's average of 9.8X. Additionally, the stock has a PEG ratio of 3.35. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Crown currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Crown passes the test. Thus, it seems as though Crown shares could have potential in the weeks and months to come.
How Does Crown Stack Up to the Competition?
Shares of Crown have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Silgan Holdings (SLGN), Sealed Air (SEE), and UFP Technologies (UFPT), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 9% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Crown, even beyond its own solid fundamental situation.
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Crown Holdings, Inc. (CCK) : Free Stock Analysis Report
Silgan Holdings Inc. (SLGN) : Free Stock Analysis Report
Sealed Air Corporation (SEE) : Free Stock Analysis Report
UFP Technologies, Inc. (UFPT) : Free Stock Analysis Report
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