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Here's Why You Should Invest in Crown Holdings (CCK) Stock Now

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·4 min read
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Crown Holdings, Inc. CCK looks promising at the moment, driven by a surge in the global beverage-can demand, as consumers are preferring cans over other packaging formats. The company’s focus on investments in can-capacity expansion and acquisitions to capitalize on this demand trend is remarkable.

The company currently carries a Zacks Rank #2 (Buy) and has 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 6.2% so far this year, outperforming the industry’s growth of 2.2%.

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Earnings Surprise History: The company has a trailing four-quarter average earnings surprise of 22.6%.

Return on Equity (ROE): Crown Holdings’ trailing 12-month ROE of 38.2% reinforces its growth potential. The company’s ROE is higher than the industry’s ROE of 33.3%, highlighting its efficiency in utilizing shareholder funds.

Solid Q2 Results & Upbeat 2021 Outlook: Crown Holdings’ second-quarter 2020 adjusted earnings per share of $2.14 beat the Zacks Consensus Estimate of $1.80 as well as improved 61% year over year.

The company anticipates adjusted earnings per share for the current year to lie between $7.30 and $7.40, reflecting year-over-year growth of 24% at the mid-point.

Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 8% over the past 60 days.

Positive Growth Projections: The Zacks Consensus Estimate for the ongoing-year earnings per share is currently pegged at $7.49, indicating year-over-year growth of 26.5%.

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

Other Factors at Play

The beverage can is increasingly becoming the preferred packaging options for marketers and consumers globally owing to its sustainable and infinitely recyclable benefits. An estimated 75% of new beverage product launches are now in cans. The average segment income from continuing operations in the last four quarters (or last 12 months ended June 2021) is approximately $100 million per quarter, higher than the average of the four preceding quarters (or last 12 months ended June 2020). Approximately $60 million of that income growth has resulted from the Americas Beverage segment. The developing markets have witnessed higher growth rates owing to the rising per capita income and the consequent increase in beverage consumption. As demand is likely to surpass supply in the near term, the company 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. Strategic acquisitions in geographic areas and product lines will aid the company to capitalize on this trend. It is focused on disciplined pricing, cost control and capital allocation.

Other Stocks to Consider

Some other top-ranked stocks in the Industrial Products sector include Encore Wire Corporation WIRE, Lincoln Electric Holdings, Inc. LECO and Deere & Company DE. While Encore Wire and Lincoln Electric sport a Zacks Rank #1, Deere carries a Zacks Rank #2, at present.

Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.

Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22%, year to date.

Deere has an estimated earnings growth rate of 117.5% for fiscal 2021. The company’s shares have rallied 36.3%, so far this year.


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Deere & Company (DE) : Free Stock Analysis Report

Lincoln Electric Holdings, Inc. (LECO) : Free Stock Analysis Report

Crown Holdings, Inc. (CCK) : Free Stock Analysis Report

Encore Wire Corporation (WIRE) : Free Stock Analysis Report

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