Crown Earnings: Demand for Aluminum Beverage Cans Recovers as Destocking Headwinds Abate

Narrow-moat-rated Crown Holdings reported first-quarter results that came with few surprises. Net sales fell 6.5% year over year as most segments saw declines in the quarter despite volume gains across some of its portfolio. Crown continued to see significant weakness in its Asia operations, but this was largely offset by strength in North America and Europe. Crown’s European business faced some of the most significant destocking headwinds over the last year, so we are encouraged by its recovery as it appears destocking trends in the region have abated. We maintain our view that a shift to eco-friendly packaging will drive demand for aluminum beverage cans, but some near-term demand pressures remain. As such, we have maintained our $93 fair value estimate.