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Valued at a market cap of $17.4 billion, Ball Corporation (BALL) supplies aluminum packaging products for the beverage, personal care, and household products industries. Additionally, the Westminster, Colorado-based company produces and markets extruded aluminum aerosol containers, reclosable aluminum bottles, aluminum cups, and aluminum slugs.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and BALL fits the label perfectly. The company also provides aerospace and other technologies and services to the U.S. government. BALL is a leading supplier of recyclable aluminum packaging and is renowned for its sustainability efforts.
Despite its strengths, the aluminum packaging giant has declined 18.3% from its 52-week high of $71.32, achieved on Apr. 30. Moreover, shares of BALL have decreased 11.8% over the past three months, significantly underperforming the broader Nasdaq Composite’s ($NASX) 12.7% gain over the same time frame.
Moreover, in the longer term, BALL has fallen 1.2% over the past 52 weeks, significantly lagging behind NASX’s 35.2% returns. BALL’s shares are up nearly 1.3% on a YTD basis, massively underperforming NASX’s 32.7% gains over the same time frame.
To confirm its bearish trend, BALL has been trading below its 200-day and 50-day moving averages since late October.
BALL‘s underperformance over the past year can be primarily attributed to its declining organic revenue and cash flow margins. The company’s shares plunged 7.7% after delivering mixed Q3 earnings results on Oct. 31. Its revenue fell 13.7% year-over-year to $3.08 billion and fell short of the consensus estimates by 1.6%, while its adjusted EPS improved 10% from the year-ago quarter and surpassed the Wall Street estimates by 6%.
BALL reported higher volumes in EMEA, which was offset by lower volumes in North, Central, and South America. Despite low volumes, each of its three segments reported year-over-year improvement in profits, primarily due to significant gross and operating margin expansion.
BALL has outpaced its rival, Crown Holdings, Inc. (CCK), which declined 2.8% over the past 52 weeks and 4.6% on a YTD basis.
Despite BALL’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering it, and the mean price target of $71.77 suggests a notable 23.2% premium to its current levels.
