Headquartered in Broomfield, Colorado, Ball Corporation (BLL) is a manufacturer of metal and plastic packaging, primarily for beverages and foods. It also supplies aerospace and other technologies and services to government and commercial customers.
Ball Corporation reported 3Q08 EPS of $1.13, up 3.7% year-over-year (y-o-y) due to higher operating earnings in all businesses except plastics, lower administrative and interest expenses, and share repurchases. In the near-term, Ball's earnings should be supported by higher y-o-y selling prices and cost containment efforts.
However, the Metal Food and Household Products Packaging, Americas, unit is suffering from continued lower food can volumes. Also, in the company's PET business, soft prices (due to market overcapacity) and low volumes are limiting margin expansion. We reiterate a Hold recommendation on shares of BLL.
At its current valuation, BLL shares are trading at 7.4x our 2009 EPS estimate of $4.13, at a discount to the industry median multiple and its peer group. Our target price of $31.75 is based on around 7.7x our 2009 EPS estimate of $4.13.
Read the full analyst report on BLL
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