Ball Earnings: Aluminum Can Demand Continues to Recover Amid Moderating Inventory Destocking

Narrow-moat-rated Ball reported a solid first quarter despite challenging end market dynamics. Net sales declined 3.5% year over year, mainly due to the pass through of lower aluminum costs as shipments across the company held up relatively well. Ball has navigated a challenging operating market for well over a year now as inventory destocking weighed on volumes across much of its portfolio. It appears destocking headwinds have abated, and customers have returned to more normalized purchasing patterns. While some near-term demand headwinds remain, we think strength in EMEA and South America will drive positive volume growth for the full year. As such, we have maintained our $60 fair value estimate.