The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Avery Dennison (NYSE:AVY) and the rest of the industrial packaging stocks fared in Q1.
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 9 industrial packaging stocks we track reported a mixed Q1; on average, revenues missed analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 2.1% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but industrial packaging stocks have shown resilience, with share prices up 5.9% on average since the previous earnings results.
Avery Dennison (NYSE:AVY) Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Avery Dennison reported revenues of $2.15 billion, up 4.2% year on year, in line with analysts' expectations. Overall, it was an ok quarter for the company with a decent beat of analysts' earnings estimates but a miss of analysts' organic revenue estimates.
“We are off to a strong start to the year. In the first quarter we delivered significant earnings growth, driven by higher volume and productivity gains,” said Deon Stander, president and CEO.
Avery Dennison pulled off the fastest revenue growth of the whole group. The stock is up 6.1% since reporting and currently trades at $223.93.
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Best Q1: Packaging Corporation of America (NYSE:PKG) Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products, also offering displays and protective packaging solutions.
Packaging Corporation of America reported revenues of $1.98 billion, flat year on year, outperforming analysts' expectations by 3.7%. It was an exceptional quarter for the company with an impressive beat of analysts' volume estimates and a narrow beat of analysts' earnings estimates .
The market seems happy with the results as the stock is up 7.4% since reporting. It currently trades at $192.56.
Weakest Q1: Silgan Holdings (NYSE:SLGN) Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Silgan Holdings reported revenues of $1.32 billion, down 7.1% year on year, falling short of analysts' expectations by 4.1%. It was a weak quarter for the company with a miss of analysts' organic revenue estimates.
As expected, the stock is down 1.6% since the results and currently trades at $45.92.
Crown Holdings (NYSE:CCK) Formerly Crown Cork & Seal, Crown Holdings (NYSE:CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.
Crown Holdings reported revenues of $2.78 billion, down 6.4% year on year, falling short of analysts' expectations by 5.1%. Overall, it was a weaker quarter for the company witha miss of analysts' constant currency revenue estimates.
The stock is down 4% since reporting and currently trades at $77.84.
Berry Global Group (NYSE:BERY) Founded as Imperial Plastics, Berry Global (NYSE: BERY) is a manufacturer and marketer of plastic packaging products, including containers, bottles, and prescription packaging.
Berry Global Group reported revenues of $3.08 billion, down 6.4% year on year, falling short of analysts' expectations by 2.1%. Revenue aside, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
The stock is up 3.3% since reporting and currently trades at $63.31.
This content was originally published on Stock Story
