Company Reports

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.

Crown Holdings is the world's second-largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

Narrow-moat-rated Crown Holdings reported underwhelming fourth-quarter results that capped off a challenging year. Net sales fell over 5% in the fourth quarter from a year ago as all but one segment reported significant declines. Weak consumer demand in Crown’s international markets persisted for much of the quarter, with both Europe and Asia experiencing volume declines that led to double-digit decreases in revenue in the fourth quarter. While we maintain our view that Crown’s aluminum can business will benefit from a long-term shift to eco-friendly packaging, we expect weakness in the company’s international markets will likely persist through the first half of 2024. As such, we've decreased our fair value estimate to $93 per share from $96 to reflect lower near-term revenue and profitability in our forecast.

Crown Holdings is the world's second-largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

Narrow-moat-rated Crown Holdings reported third-quarter results that were largely in line with our expectations. Net sales fell roughly 6% year over year as Crown continued to navigate softening beverage can demand in Asia and weakness in its transit packaging business. However, recovering demand in North America and Europe buoyed Crown’s volume in the quarter, and inflationary pass-throughs from 2022 drove a 310-basis point increase in operating margin year over year. We've decreased our fair value estimate to $96 per share from $97 to reflect lower near-term revenue in our forecast.

Crown Holdings is the world's second-largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

Narrow-moat-rated Crown Holdings reported solid second-quarter results that came with few surprises. Net sales fell over 11% year over year as Crown continues to navigate a challenging operating environment, with inflationary pressures and economic uncertainty weighing on can volumes. Revenue was impacted by the pass through of lower aluminum costs as prices retreated significantly from a year ago. Despite near-term headwinds, we continue to believe Crown is well positioned to benefit from persistent long-term demand for aluminum cans. As such, we maintain our $97 fair value estimate.

Crown Holdings is the world's second-largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

Crown Holdings delivered solid first-quarter results as sequential margin improvement and resilient volume from the Americas beverage segment helped to offset moderating international demand. Slowing economies and tighter consumer spending weighed on can demand in Crown's international markets. Nevertheless, management reaffirmed its $6.30 (midpoint) adjusted EPS guidance, which seems achievable to us given the strength in North America and expected boost in the second half of the year. We believe Crown is well-positioned to benefit from persistent long-term demand for aluminum cans and is poised to deliver modest margin expansion through the remainder of the year. As such, we maintain our $97 fair value estimate.

Crown Holdings is the world's second-largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

Crown Holdings is the world's second largest producer of aluminum beverage cans. Used primarily for carbonated soft drinks and beer, aluminum cans are historically a low-growth industry but one with favorable competitive dynamics for incumbents. Crown operates 200 manufacturing plants across 40 countries and continues to evaluate new markets for its products. In recent years, Crown has divested from specific industries (such as its European food and aerosol businesses) as it increases its focus on producing aluminum cans in markets where it can earn strong economic profits.

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.

We are dropping coverage of Crown Holdings. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

In the fourth quarter, Crown continued to benefit as people spent more time at home because of the COVID-19 pandemic. Aluminum beverage cans remained in high demand, which we expect to continue heading into 2021. Food can volumes were also robust. Only the transit segment remains a true work in progress, with the business still recovering from the global recession. We anticipate another year of robust earnings growth in 2021, with adjusted earnings per share nearing the high end of management's guidance at $6.75. We've slightly increased our fair value estimate to $68 per share from $67, mainly due to the time value of money. Our narrow moat rating is unchanged.

Crown is the world's second-largest producer of aluminum beverage cans and is a large producer of steel food cans. Used primarily for carbonated soft drinks and beer, beverage cans are a slow-growth industry, but one with favorable competitive dynamics for incumbents. The merger of the industry's former number-one and -two players, Rexam and Ball, has not materially altered the competitive landscape.

Crown mustered a robust third quarter, as global demand for both beverage cans and food cans remained frothy. Beverage can sales volumes rose 8% from the year prior, with food can sales up 9%. We think food can demand will ebb as dining patterns return to normal. In contrast, we're raising our near-term expectations for beverage cans to reflect a more capacity-constrained market for at least the next 1-2 years. We expect margins will remain elevated as Crown runs its facilities flat-out to keep up with demand. This change spurred our fair value estimate higher to $67 per share, up from $59. The company's narrow moat rating is unchanged. Despite our fair value increase, we still see shares as overvalued.

Crown is the world's second-largest producer of aluminum beverage cans and is a large producer of steel food cans. Used primarily for carbonated soft drinks and beer, beverage cans are a slow-growth industry, but one with favorable competitive dynamics for incumbents. The merger of the industry's former number-one and -two players, Rexam and Ball, has not materially altered the competitive landscape.

Crown is the world's second-largest producer of aluminum beverage cans and is a large producer of steel food cans. Used primarily for carbonated soft drinks and beer, beverage cans are a slow-growth industry, but one with favorable competitive dynamics for incumbents. The merger of the industry's former number-one and -two players, Rexam and Ball, has not materially altered the competitive landscape.

Crown Holdings endured challenging market conditions in the second quarter. However, a return to normalcy in Asia and increased at-home beverage consumption in America partially offset the slowdown in Europe and South America. We expect improved results in the second half of the year, as Asia and Europe sales volumes recover. We've slightly raised our near-term profit forecasts to reflect the pull-forward of incremental production capacity. Our fair value estimate rises to $59 per share from $57 and our narrow-moat rating is unchanged.