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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Ball Cannot Keep up With Frothy Demand as Volume Moves From Tap to Container

Charles Gross Equity Analyst

Analyst Note

| Charles Gross |

Surging sales showed no sign of slowing down in Ball's fourth quarter. Sales rose a remarkable 14% year over year, as beverages have flowed out of bars and restaurants and into homes. Ball, among peers, has been producing flat-out and yet cannot keep up with demand. Accordingly, after a record year of capital spending, Ball is doubling down and aims to spend $1.5 billion next year to add capacity. While near-term results should be fantastic, as conditions normalize and people begin to eat out again, we could see supply overshoot demand. We have left our $49 per share fair value and narrow moat rating unchanged.

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Company Profile

Business Description

Ball is the world's largest metal can manufacturer. The company is focused on increasing capacity amid a wave of new developed-market demand, while pivoting toward faster-growing emerging-market economies in beverage cans. Ball maintains a small presence in both the North American food can market and the U.S. defense industry through its aerospace segment.

Contact
10 Longs Peak Drive, P.O. Box 5000
Broomfield, CO, 80021-2510
T +1 303 469-3131
Sector Consumer Cyclical
Industry Packaging & Containers
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 21,500