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Silgan Holdings Inc SLGN

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Silgan's Fourth-Quarter Earnings Remain Heady Amid Elevated North American COVID-19 Cases

Charles Gross Equity Analyst

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.

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Company Profile

Business Description

Silgan Holdings manufactures about half of the metal food containers in North America. Its major customers include Campbell Soup, Nestle, and Del Monte. Silgan is looking for more merger and acquisition opportunities in the European metal packaging market and in plastic packaging. Silgan's other business segments include plastic containers for personal and healthcare products and a closures business that manufactures metal and plastic lids and caps.

Contact
4 Landmark Square, Suite 400
Stamford, CT, 06901
T +1 203 975-7110
Sector Consumer Cyclical
Industry Packaging & Containers
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 15,500