Ball Earnings: North America Can Demand Shows Litle Sign of Improvement, Raising Market Concerns

Narrow-moat-rated Ball reported an underwhelming fourth quarter that came with few surprises. Net sales fell about 1% year over year, mainly due to declines in the North, South, and Central America markets. Demand in Europe remained strong, which buoyed Ball’s results in the quarter. That said, Ball continued to make progress on its cost-cutting initiatives and benefited from improving operating efficiencies in the quarter. While we are encouraged by the continued strength experienced in Europe, headwinds in North and South America persisted into the fourth quarter. As such, we’ve decreased our fair value estimate to $58 per share from $60 due to lower near-term revenue in our forecast.