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Here's Why Crown Holdings (CCK) Stock is a Solid Pick Now

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Zacks Equity Research
·4 min read
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Crown Holdings, Inc. CCK is poised well to gain from surge in global beverage can demand as consumers are preferring cans over other packaging formats. The company’s focus on capacity extension and acquisitions to capitalize on this demand is commendable. Crown Holdings is focused on disciplined pricing, cost control and capital allocation.

The company currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let's delve deeper into the factors that make Crown Holdings stock a compelling investment option at the moment.

Price Performance: The stock has gained 48.4% over the past six months, compared with the industry’s growth of 32.1%.


Earnings Surprise History: The company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.7%.

Return on Equity (ROE): Crown Holdings’ trailing 12-month ROE of 34% reinforces its growth potential. The company’s ROE is higher than the industry’s ROE of 33%, highlighting its efficiency in utilizing shareholder funds.

Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s fourth-quarter and 2020 earnings moved north by 12% and 10%, respectively, over the past 60 days. The same for 2021 has moved up 11% over the past 60 days.

Positive Growth Projections: The Zacks Consensus Estimate for ongoing-year’s earnings per share is currently pegged at $5.71, indicating year-over-year growth of 11.7% from the prior year. The same for 2021 stands at $6.37, suggesting an improvement of 11.5% from the prior-year period.

The stock has an estimated long-term earnings growth rate of 5%.

Other Growth Drivers

With its many inherent benefits, including being infinitely recyclable, the beverage can is increasingly becoming the preferred package for marketers and consumers globally. Developing markets such as Mexico and Brazil have experienced higher growth rates owing to rising per capita income and the consequent increase in beverage consumption. While the economies in Europe and North America are more mature, there are still growth opportunities aided by beverages, such as energy drinks, teas, juices, sparkling water and craft beer, and an increased preference for cans over certain other forms of beverage packaging. Crown Holdings is anticipated to gain from this global trend.

Crown Holdings continues to implement several beverage-can capacity-expansion projects in a bid to meet surging beverage-can demand. Further, strategic acquisitions in geographic areas and product lines will also continue to aid the company in tapping this demand.

Other Stocks to Consider

Some other top-ranked stocks in the Industrial Products sector include AGCO Corporation AGCO, Deere & Company DE and Silgan Holdings Inc. SLGN. While AGCO and Deere flaunt a Zacks Rank #1, Silgan carries a Zacks Rank of 2, at present.

AGCO has an estimated earnings growth rate of 16% for the ongoing year. Shares of the company have soared 79% in the past six months.

Deere has an expected earnings growth rate of 46% for fiscal 2021. The stock has gained 68% over the past six months.

Silgan has a projected earnings growth rate of 37.9% for the current year. Over the past six months, the company’s shares have appreciated 19.1%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Crown Holdings, Inc. (CCK) : Free Stock Analysis Report
Silgan Holdings Inc. (SLGN) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
AGCO Corporation (AGCO) : Free Stock Analysis Report
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Zacks Investment Research