Dj Vp Chainey Registers 964 Of Aptargroup Inc >Atr

Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Pactiv Evergreen Inc. (PTVE) or AptarGroup (ATR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Pactiv Evergreen Inc. and AptarGroup are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PTVE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PTVE currently has a forward P/E ratio of 11.82, while ATR has a forward P/E of 32.61. We also note that PTVE has a PEG ratio of 1.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ATR currently has a PEG ratio of 3.02.

Another notable valuation metric for PTVE is its P/B ratio of 2. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ATR has a P/B of 4.57.

Based on these metrics and many more, PTVE holds a Value grade of A, while ATR has a Value grade of D.

PTVE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PTVE is likely the superior value option right now.

Zacks Investment Research

Sealed Air Corporation SEE reported third-quarter 2024 adjusted earnings per share (EPS) of 79 cents, which surpassed the Zacks Consensus Estimate of 66 cents by a margin of 19.7%. The bottom line increased 2.6% year over year.

SEE’s results benefited from its cost take-out to grow program (CTO2Grow Program) and cost-control initiatives. Improvement in the Food segment’s results were offset by the continued weakness in the Protective segment.

Including special items, the company delivered EPS from continuing operations of 61 cents compared with the year-ago quarter’s 40 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Sealed Air Corporation Price, Consensus and EPS Surprise

Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote

Sealed Air’s Revenues Dip Y/Y

Total revenues were $1.35 billion, which beat the Zacks Consensus Estimate of $1.34 billion. The figure was down 2.7% year over year.

Pricing and currency had unfavorable impacts of 1.8% and 0.4%, respectively. Volumes declined 0.5% year over year as higher volumes in the Food segment were offset by the ongoing weakness in the Protective segment.

Our model predicted unfavorable impact of 2.4% from pricing and a volume decline of 0.5% year over year.

Sales in the Americas were down 3.5% year over year to $876 million, while sales in EMEA were down 4.3% to $273 million. Sales in APAC, however, increased 4% year over year to $196 million.

SEE’s Margins Contract

The cost of sales went down 2.6% year over year to $944 million. The gross profit was $401.5 million, which marked a 3% dip from the year-ago quarter’s $413 million. The gross margin was 29.8%, a marginal contraction from the year-ago quarter’s 29.9%.

SG&A expenses were $187 million, up 3% from the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were around $276 million, down 3% from the year-ago period.

Lower volumes and unfavorable net price realization in Protective, partially offset by lower operating costs due to productivity benefits as a result of the CTO2Grow Program, led to the year-over-year decline. The adjusted EBITDA margin was 20.5%, indicating a 10-basis point contraction from the year-ago quarter.

Sealed Air’s Segment Performances in Q3

Food: Net sales increased 0.5% year over year to $898 million. The figure surpassed our estimate of $893 million.

Pricing actions had an unfavorable impact of 1.4%, while volumes were up 2.4%, reflecting strong end-market demand and competitive share gains. Foreign currency had an unfavorable impact of 0.5%. We expected volume growth of 3% and pricing to be down 2.5%.

Adjusted EBITDA was around $206 million, up 6% from the last year’s quarter, aided by higher volumes, favorable net price realization and lower operating costs as a result of its CTO2Grow Program. The reported figure surpassed our estimate of $196 million.

Protective: The segment reported net sales of $447 million, down 8.4% from the year-ago quarter. We had projected net sales to be $422 million.

Pricing had a negative impact of 2.7% and volumes fell 5.7%, due to the ongoing weakness in industrial and fulfillment portfolios. We expected a volume decline of 7% and an unfavorable pricing impact of 2.3%.

The segment’s adjusted EBITDA decreased 21% year over year to $76 million, due to weak volumes and unfavorable net price realization, somewhat offset by a decline in operating costs (aided by efforts to improve productivity). We expected adjusted EBITDA to be $79 million.

SEE’s Cash Flow & Balance Sheet Updates

Cash flow generated from operating activitieswas around $484 million in the first nine-month period of 2024 compared with $193 million in the year-ago comparable period. Sealed Air paid cash dividends of $89 million in the same period.

As of Sept. 30, 2024, Sealed Air’s net debt was $4.1 billion compared with $4.3 billion as of Dec. 31, 2023. As of the end of the third quarter, the company had $1.4 billion of liquidity available, which comprised $386 million in cash and $1 billion of undrawn, committed credit facilities.

Sealed Air Updates 2024 Guidance

Sealed Air expects net sales in 2024 to be in the range of $5.375-$5.425 billion compared with the prior stated guidance of $5.2-$5.6 billion. Adjusted EBITDA is now projected between $1.09 billion and $1.11 billion. SEE had earlier anticipated the metric to be in the range of $1.05 -$1.15 billion.

Adjusted EPS is forecast to be between $3.00 and $3.10 compared with the prior stated range of $2.65-$3.05. Sealed Air’s CTO2Grow Program is expected to yield $90 million of incremental cost savings in 2024.

Free cash flow is expected to be in the range of $350-$450 million, higher than its previous expectation of $325-$425 million.

SEE Stock’s Price Performance

In the past year, Sealed Air’s shares have gained 10.5% compared with the industry’s 18.5% growth.

Sonoco Products Company SON reported adjusted earnings per share (EPS) of $1.49 in third-quarter 2024, beating the Zacks Consensus Estimate of $1.44. The figure was within the company’s guidance of $1.40-$1.60. The bottom line improved 2% from the prior-year quarter.

Including one-time items, the company reported an EPS of 51 cents compared with the year-ago quarter’s $1.32.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Sonoco’s net sales were $1.68 billion, which missed the Zacks Consensus Estimate of $1.70 million. The top line fell 2% year over year, hurt by the divestiture of Protective Solutions and the thermoformed food packaging plant closure.

Sonoco Products Company Price, Consensus and EPS Surprise

Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote

Sonoco’s Q3 Operational Update

The cost of sales was $1.32 billion, 2.2% lower than the year-earlier quarter. The gross profit in the reported quarter totaled $359 million, down 1.4% year over year. The gross margin was 21.4% compared with the year-ago quarter’s 21.3%.

Selling, general and administrative expenses amounted to $191 million, up 4.4% year over year.

Adjusted operating income was $211 million in the reported quarter compared with the prior-year quarter’s $213 million. The operating margin was 12.6%, down from the year-ago quarter’s 12.5%.

SON’s Q3 Segmental Performance

The Consumer Packaging segment’s net sales were fairly flat year over year at $984 million. The impacts of lower pricing were partially offset by year-over-year volume growth in metal aerosol cans and flexible packaging. Operating profit amounted to $123 million, up 5% from the prior-year quarter.

Net sales in the Industrial Paper Packaging segment were $585 million, reflecting a year-over-year rise of 1% due to higher selling prices. Operating profit totaled $70 million, reflecting a 6% year-over-year fall. The gains were partially offset by continued pressure from cost impacts.

Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, were $107 million, down 26% year over year. Operating profit for the segment totaled $17 million compared with the year-ago quarter’s $21 million.

Sonoco’s Q3 Cash Flow & Balance Sheet Updates

SON reported cash and cash equivalents of $1.93 billion at the end of the third quarter of 2024 compared with $0.15 billion at the end of 2023. The company generated cash flow from operating activities of around $438 million in the first nine months of 2024 compared with $617 million in the prior-year period.

As of Sept. 29, 2024, total debt was $4.8 billion, up $1.7 billion from Dec. 31, 2023.

SON’s Q4 & 2024 Guidance

Sonoco projects the fourth-quarter 2023 adjusted EPS between $1.15 and $1.35.

The company expects an adjusted EPS of $5.05-$5.25 for 2024, updated from the prior mentioned $5.00-$5.30. Adjusted EBITDA is expected between $1.05 billion and $1.09 billion. The operating cash flow for the year is expected between $650 million and $750 million.

Sonoco’s Price Performance

SON shares have lost 3.9% in the past year against the industry’s growth of 27.2%.

SON’s Zacks Rank

The company currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sonoco’s Peer Performances in Q3

Packaging Corporation of America PKG reported an adjusted EPS of $2.65 in the third quarter of 2024, beating the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments, and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.

Sales in the third quarter rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.

AptarGroup, Inc. ATR posted third-quarter 2024 adjusted EPS of $1.49, beating the Zacks Consensus Estimate of $1.43. The bottom line increased 6% year over year from $1.40 (including comparable exchange rates).

Total sales grew 1.8% year over year to $909 million in the reported quarter. However, the reported figure missed the Zacks Consensus Estimate of $932 million. Core sales, excluding currency and acquisition effects, improved 2% year over year due to strong performances in the pharma and closures segments. We expected core sales to rise 4.7% in the quarter.

Amcor Plc AMCR reported a first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted EPS of 16 cents, which met the Zacks Consensus Estimate. The bottom line grew 4% from the year-ago quarter.

Total sales fell 2.6% year over year to $3.35 billion in the reported quarter. The downside was led by a 1% unfavorable impact of foreign exchange and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.57 billion.

Zacks Investment Research

Amcor Plc AMCR reported first-quarter fiscal 2024 (ended Sept. 30, 2024) adjusted earnings per share (EPS) of 16 cents, which met the Zacks Consensus Estimate. The bottom line grew 4% from the year-ago quarter.

Including special items, the company reported net earnings per share of 13 cents compared with 11 cents in the prior-year quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Total revenues fell 2.6% year over year to $3.35 billion in the reported quarter. The downside was led by a 1% unfavorable impact of foreign exchange and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.57 billion.

The price/mix had impacts of around 3% on sales. The volume rose 2% from the year-ago quarter.

Amcor’s Q1 Cost & Margins

The cost of sales was down 3.7% year over year to $2.69 billion. Gross profit grew 2.2% year over year to $659 million. The gross margin was 19.7% compared with the year-ago quarter’s 18.7%.

Amcor PLC Price, Consensus and EPS Surprise

Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote

SG&A expenses were $315 million, up 4.3% year over year. Adjusted operating income was $365 million in the quarter, up 2% from $358 million in the prior-year quarter. The adjusted operating margin was 10.9% compared with 10.4% in the prior-year quarter. Adjusted EBITDA in the quarter was $466 million compared with $459 million in the prior-year quarter.

AMCR’s Q1 Segmental Performance

Flexibles: Net sales decreased 0.6% year over year to $2.55 billion. Volume rose 3% year over year. Our model projected net sales of $2.66 billion and 3.5% year-over-year volume growth. Adjusted operating income improved 2.2% year over year to $329 million. We expected an adjusted operating income of $349 million.

Rigid Packaging: The segment reported net sales of $801 million in the reported quarter, down 8.5% from the prior-year quarter. Volume was down 4% year over year. We expected net sales of $909 million and a volume decline of 1.9% from the prior-year quarter. Adjusted operating income was $62 million, flat year over year. Our prediction for the segment’s operating income was $65 million.

Amcor’s Q1 Cash Flow & Balance Sheet Updates

As of Sept. 30, 2024, Amcor had $432 million of cash and cash equivalents compared with $588 million as of June 30, 2024. The company used $269 million of cash in operating activities in the first quarter of fiscal 2024 compared with $135 million in the year-ago quarter.

As of Sept. 30, 2024, Amcor’s net debt totaled $6.87 billion, up from $6.11 billion as of June 30, 2024.

AMCR’s FY25 Guidance

Adjusted EPS for fiscal 2025 is expected to be 72-76 cents. The company projects an adjusted free cash flow of $900-1,000 million for fiscal 2025.

Amcor’s Price Performance

In the past year, AMCR shares have gained 34.4% compared with the industry’s 33.3% growth.

AMCR’s Zacks Rank

Amcor currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Packaging Stocks

AptarGroup, Inc. ATR reported third-quarter 2024 adjusted earnings per share (EPS) of $1.49, beating the Zacks Consensus Estimate of $1.43. The bottom line increased 6% year over year from $1.40 (including comparable exchange rates).

Total revenues grew 1.8% year over year to $909 million in the reported quarter. However, the reported figure missed the Zacks Consensus Estimate of $932 million. Core sales, excluding currency and acquisition effects, improved 2% year over year due to strong performances in the pharma and closures segments. We expected core sales to rise 4.7% in the quarter.

Packaging Corporation of America PKG posted an adjusted EPS of $2.65 in the third quarter of 2024, beating the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments, and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.

Sales in the third quarter rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.

Packaging Stock Awaiting Results

Sealed Air Corporation SEE, scheduled to release third-quarter 2024 results on Nov. 7, has a trailing four-quarter average surprise of 35.2%. The Zacks Consensus Estimate for SEE’s third-quarter 2024 earnings is pegged at 66 cents per share, implying a year-over-year fall of 14.3%.

The Zacks Consensus Estimate for the company’s top line is pegged at $1.34 billion, indicating a decrease of 2.9% from the prior-year reported figure.

Zacks Investment Research