Revance Falls After Co Withdraws Annual Forecast, Extends Deadline For Tender Offer

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Crown Holdings (CCK). CCK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.93, which compares to its industry's average of 15.14. Over the past year, CCK's Forward P/E has been as high as 15.28 and as low as 11.02, with a median of 13.26.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CCK has a P/S ratio of 0.96. This compares to its industry's average P/S of 0.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Crown Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCK feels like a great value stock at the moment.

Zacks Investment Research

Ball Corporation BALL reported third-quarter 2024 adjusted earnings per share (EPS) of 91 cents, which beat the Zacks Consensus Estimate of 87 cents. The bottom line improved 10% year over year. BALL reported higher volumes in EMEA that offset lower volumes in North and Central America and South America. Despite low volumes, each of its three segments reported year-over-year improvement in profits.

On a reported basis, Ball’s EPS from continuing operations was 63 cents compared with the prior-year quarter’s 42 cents.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Ball Corp.’s Sales Dip Y/Y

Total sales were $3.08 billion, a 1% dip from $3.11 billion (the figure is exclusive of the company's divested aerospace business) in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.17 billion.

Ball Corporation Price, Consensus and EPS Surprise

Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote

BALL Delivers Y/Y Improvement in Margins

The cost of sales was $2.43 billion, down 3.5% from the year-ago quarter. The gross profit totaled $657 million, up from the year-ago quarter’s $599 million. The gross margin was 21.3%, a 200-basis point expansion from the prior-year quarter’s 19.3%.

Selling, general and administrative expenses rose 7% year over year to $142 million. Comparable segment operating earnings were $409 million, 13.6% higher than the prior-year quarter’s $360 million. Segment operating margin was 13.3% compared with 11.6% in the year-ago quarter.

Ball Corp.’s Segment Performances in Q3

The Beverage Packaging North and Central America segment’s revenues decreased 5.5% year over year to $1.46 billion due to lower volumes and price/mix. We predicted sales of $1.53 billion.

Operating earnings amounted to $203 million, up 3.6% year over year as impact of price/mix was partially offset by lower volumes of 3.1%. Our estimate for the segment's operating earnings was $224.6 million.

Sales in the Beverage Packaging EMEA segment were $950 million, up 5.3% year over year aided by higher volumes. The reported figure surpassed our estimate of $926 million

Operating earnings were $128 million, marking 24.3% year-over-year growth. The improvement was driven by higher volumes. We projected operating earnings of $117 million.

The Beverage Packaging South America segment’s revenues dipped 1% year over year to $484 million as favorable price/mix was offset by lower volumes. The impact of disruptive economic and operating conditions in Argentina led to a decline in volumes. Our projection for the segment’s sales was $514 million.

Operating earnings rose 28% to $78 million. The reported figure beat our estimate of $63 million.

BALL’s Cash Flow & Debt Position

The company reported cash and cash equivalents of $1.44 billion at the end of the third quarter, up from $1.34 billion at the end of the prior-year quarter. Cash used in operating activities amounted to $385 billion in the first nine-month period of 2024 (including $4.7 billion pertaining to the gain on Aerospace disposal) against an inflow of $1.13 billion in the comparable period last year.

The company’s long-term debt decreased to $5.35 billion from $7.48 billion at the end of the third quarter of 2023.

In the first nine-month period of 2024, Ball Corp. returned $1.25 billion to shareholders through share repurchases and dividends. It expects to return more than $1.6 billion to shareholders by the end of 2024.

The company recently completed the acquisition of Alucan Entec, S.A., a European impact extruded aluminum packaging business.

Ball Corp.’s Outlook for 2024

The company expects to either meet or exceed its stated goal of more than mid-single-digit comparable EPS growth in 2024 and generate a strong free cash flow. BALL targets to deliver comparable diluted EPS growth of greater than 10% per year in 2025 and thereafter.

BALL Stock’s Price Performance

Ball Corp.’s shares have gained 33.4% over the past year compared with the industry’s 26.5% growth.

Investors in Crown Holdings, Inc. CCK need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 17, 2025 $50 Put had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Crown Holdings shares, but what is the fundamental picture for the company? Currently, Crown Holdings is a Zacks Rank #2 (Buy) in the Containers - Metal and Glass industry that ranks in the Top 13% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while two have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.55 per share to $1.54 in that period.

Given the way analysts feel about Crown Holdings right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Zacks Investment Research

U.S. stocks were higher, with the Dow Jones index gaining around 200 points on Monday.

Shares of PROCEPT BioRobotics Corporation rose sharply during Monday's session after the company reported better-than-expected third-quarter financial results and raised its FY24 revenue guidance.

PROCEPT BioRobotics shares jumped 25% to $85.87 on Monday.

Here are some other big stocks recording gains in today's session.

• Monte Rosa Therapeutics, Inc. shares jumped 60.5% to $7.85 after the company announced a global license agreement with Novartis to advance VAV1 MGDs. The company will receive a $150 million upfront payment and is eligible for additional milestone payments.
• EyePoint Pharmaceuticals, Inc. gained 33.6% to $12.69 after the company showed early trial data for DURAVYU for diabetic macular edema and announced improving vision and anatomy.
• Revance Therapeutics, Inc. shares gained 25.5% to $5.89 after the company announced it entered into the sixth amendment to its exclusive distribution agreement with Teoxane.
• ImmunityBio, Inc. gained 19.5% to $6.36.
• Trump Media & Technology Group Corp. rose 15.3% to $44.91. The stock may be moving amid possible volatility as traders evaluate his chance of winning the 2024 presidential election.
• Prothena Corporation plc surged 15.3% to $17.66.
• Serve Robotics Inc. gained 13.8% to $11.09. Ladenburg Thalmann analyst Glenn Mattson initiated coverage on Serve Robotics with a Buy rating and announced a price target of $16.
• Vera Therapeutics, Inc. rose 12.1% to $46.05 after the company reported 96-week eGFR stabilization on Saturday for its Phase 2b study of IgAN patients with Atacicept.
• MINISO Group Holding Limited gained 10.3% to $19.21.
• TeraWulf Inc. rose 10.2% to $7.03.
• WeRide Inc. W gained 9% to $18.03.
• Newell Brands Inc. rose 8.3% to $9.45. Canaccord Genuity analyst Brian McNamara maintained Newell Brands with a Buy and raised the price target from $12 to $13.
• MicroStrategy Incorporated gained 7% to $251.00 amid a rise in Bitcoin.
• MARA Holdings, Inc. rose 6.3% to $18.14 amid a rise in Bitcoin.

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