We Think Crown Will Benefit From a Shift to Eco-Friendly Packaging Despite Near-Term Headwinds

We are initiating coverage on Crown Holdings with a fair value estimate of $97 per share. We assign narrow moat and stable moat trend ratings to Crown, and we believe the company mainly benefits from an efficient scale moat source. Crown primarily produces aluminum beverage cans that are used for carbonated soft drinks and beers. While aluminum cans are historically a low-growth industry, it has very favorable competitive dynamics for incumbents. The aluminum beverage can business is highly concentrated, with most regions typically serviced by a few large competitors that maintain long-standing relationships and strong contracts with beverage companies.