Analyst Note| Charles Gross |
Aptar wrapped up the year on solid footing. The company delivered promising organic revenue growth across two of its three segments, with pharma's COVID-19 tailwinds likely to continue. However, share prices moved lower after Aptar's earnings release due to the prospect of increased near-term capital spending and a near-term rise in resin costs. Neither of these developments substantially changes our outlook for the company. We've mildly reduced our near-term profit forecasts to account for temporarily narrower margins and slower growth in Beauty & Home, but our long-term assumptions are intact. Our fair value estimate falls to $123 per share from $125, but our narrow moat rating is unchanged. Shares look modestly overvalued, trading about 12% above our valuation.