Analyst Note| Charles Gross |
With restaurant traffic subdued through the fourth quarter, food cans continue to fly off the shelves, which has benefited Silgan. Fourth-quarter revenue leaped to $1.23 billion, up 17% from the prior year. Improving operating leverage and robust sales growth drove adjusted EPS to jump over 50% to $0.60 per share. All three segments performed solidly during the quarter and year. North America's gradual recovery from the coronavirus epidemic suggests that 2021 should be similarly robust. We think management's guidance to $3.30-$3.45 in adjusted earnings per share will be attainable and have modestly increased our near-term forecasts. However, beyond 2021, we expect a volume slowdown as consumption trends normalize. Our fair value rises to $33 per share from $32, and our narrow moat rating is unchanged.