Crown Holdings, Inc. (CCK) on Q2 2021 Results - Earnings Call Transcript

Operator: Good morning and welcome to Crown Holdings Second Quarter 2021 Conference Call. . Please be advised that this conference is being recorded. I would now like to turn the call over to Mr. Thomas Kelly, Senior Vice President and Chief Financial Officer. Sir, you may begin. Thomas Kelly: Thank you, Harley, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crowncork.com. On this call, as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including in our Form 10-K for 2020 and subsequent filings. Earnings for the quarter were $0.95 per share compared to $0.94 in the prior year quarter. Adjusted earnings per share increased to $2.14 in the quarter compared to $1.33 in 2020. Net sales in the quarter were up 34% from the prior year primarily due to increased volumes across all segments, favorable foreign currency translation and the pass-through of higher material costs. Segment income improved to $395 million in the quarter compared to $250 million in the prior year primarily due to higher sales unit volumes, including recovery in many locations affected by COVID in last year's second quarter. As we outlined in the release, we currently estimate third quarter 2021 adjusted earnings of between $1.90 and $2 per share. This estimate includes the results of the European Tinplate operations through August 31. We are increasing the midpoint of our full year adjusted earnings guidance from $6.70 per share to $7.35 per share, again, assuming the sale of the European Tinplate business closes at the end of August. Our expected adjusted tax rate for the full year remains at 24% to 25%. I'll now turn the call over to Tim. Timothy Donahue: Thank you, Tom. Good morning to everyone, and thank you for joining us this morning and our continued best wishes for the continued health and safety of you and your families. As reflected in last night's earnings release, the company recorded another strong quarter for the 3 months ended June 30, 2021. And despite numerous transitory headwinds, such as supplier and transportation delays, COVID lockdowns and cost increases, our global associates continued to rise to the challenge of supplying our customers with high-quality packaging products in a safe and timely manner. Demand remained strong across all product lines and geographies and importantly, the company continues to convert this growth into record earnings. Average segment income from continuing operations over the last 4 quarters or the last 12 months June 2021 is approximately $100 million per quarter higher than the average of the 4 preceding quarters or LTM June 2020, with approximately $60 million of that income growth found in the Americas Beverage segment clearly a step change in our earnings output. We look forward to commercializing significant new capacity in the second half of this year into next to take the next step changeup. Operator: . The first question is from Mike Leithead from Barclays. Michael Leithead: Great. Congrats on the quarter. Tim, I think you touched on some of the supply chain disruptions that you overcame in the quarter. I was hoping you could talk a little bit more about where you're seeing that. And is it quantifiable how much you may be left on the table or missed out on this quarter because of some of these disruptions? And does that just get pushed into the third quarter? Or just any way to kind of help us think through that. Timothy Donahue: Yes. So I would say that I think you're all well aware of there are container shortages globally. So getting container -- suppliers getting containers to move product around has been a challenge. There are -- with the rapid restart of the economy both here and in Europe, component manufacturers are overwhelmed. And so their ability to manufacture components for assembly for us, for example, in our beverage can equipment-making business and/or the transit business is a little bit delayed. Construction steel, other construction products, whether it's lumber, cement, drywall, all of that in high demand and a bit delayed. Michael Leithead: Great. That's helpful color. And then maybe a follow-up question for Tom. I was hoping, could you give us how much the pass-through of aluminum and other input materials boosted sales year-over-year in the quarter? I was just hoping to get a cleaner look at overall incremental margins of the business. Thomas Kelly: Yes. I don't have that in front of me, Mike. I can follow up post call on that. Operator: The next question is from Arun Viswanathan of RBC Capital Markets. Arun Viswanathan: Congrats on the strong results. I guess I just wanted to understand, maybe get your thoughts and perspective on some of the scanner data. So we've obviously seen some conflicting reports on volumes, and those are up against some tough comps. So when you think about your own kind of beverage can volumes, you're obviously up nicely year-on-year. Where would you expect those volumes to kind of, I guess, shake out over the next couple of quarters? Would you expect similar kind of percentage gains within your own system? And again, could you help us kind of understand maybe -- or maybe just offer your own perspective on what we're seeing in the scanner decline as well? Timothy Donahue: Yes. So I -- we provided you the -- not only the second quarter volumes versus the second quarter of last year. And I don't want to say it's not relevant. But clearly, the second quarter of last year had a large event that none of us anticipated at that time, making the comparisons very easy this year. That's why we gave you the first half of '21 versus the first half of '19, you get a better picture of perhaps it forces you to extrapolate what growth is because it's over a 2-year period. But nonetheless, it's extremely significant, especially for a packaging business. Arun Viswanathan: Okay. Great. And as a quick follow-up, maybe I can just ask a question on capital and cash. So you'll be exiting this year at a relatively high rate of CapEx. And obviously, at your Investor Day, you kind of laid out a plan and outlook for capital from here on, but you also have some new commitments as far as a dividend and potentially, some stock buyback actions. So could you just kind of review the priorities for cash use at this point and where you expect to kind of finish the year on net debt and leverage? Timothy Donahue: Well, I think what we've said before is leverage, we'd like to be in the 3 to 3.5x. And depending on how we see capital requirements going forward, that will determine whether or not we're at the higher end of that range or the lower end of that range. I think we should be comfortably within that range by the end of this year, and it will allow us to buy back a significant amount of stock. Obviously, we've initiated a dividend. We're going to -- the intention is to continue to pay the dividend. And the -- depending on capital requirements going forward, I think the leverage is going to be where we want it by the end of the year, especially after the tinplate sale. And so the piece that moves around is how much stock you buy each year. So I -- in other words, almost all of the cash flow -- free cash flow we generate each year will be used for dividends and share buyback. Operator: The next question is from Kyle White of Deutsche Bank. Kyle White: Tim, Tom, congrats on the quarter. I just wanted to walk through the guidance for the full year. The raise, specifically on the back half, kind of get to about a 26% EPS raise for the back half. Just wondering how much of that is driven by having the European Tinplate results for July and August, how much is driven by some of the repurchases that you've made in the quarter and then just how much is driven by underlying business growth. Thomas Kelly: Yes. I mean so the European Tinplate business, the two months, is worth about $0.20. So then the residual is effectively everything else you mentioned, improvements in the underlying business net of anything going the other way. Kyle White: Got you. And then I want to talk about Europe. You announced the -- some new capacity here in the U.S. You haven't really announced any new capacity in Europe while other competitors or peers have. Are you considering though that you might be losing share in that reason -- region? Is it just a function of the markets you're in and the customers you have maybe not growing as fast? Or is it just you'd rather allocate capital to better markets, such as Americas and Asia Pac? Timothy Donahue: No. I don't -- I think it's just a matter of timing and don't go to sleep on us, that's all I'll say. So we have -- with the exception of the 1 market over there that we don't participate in, we participate in the balance of the Western European market. So Crown, at the appropriate time, will make those decisions and make those announcements. But no, we're fully confident in our platform in Europe and the platform's ability to offer continued growth to the company. Operator: The next question is from George Staphos of Bank of America Merrill Lynch. George Staphos: Congratulations on your progress so far. I wanted to come back to some commentary from last quarter and see what, if any, effect we should consider for the rest of the year in 2022 from your comments. So last quarter, you said you were worried a little bit about a pull forward of volume, accelerating volumes. And that was the reason why, sequentially, you were looking for a downtick in 2Q versus 1Q. As it turned out, that was not the case. You had a better quarter sequentially. Do we still have to worry about that pull forward? Or are you less concerned about that in terms of the back half of the year? And stretching a bit, recognizing it's not fourth quarter, do you think that given what you're seeing from customers from your capacity plans and your ability to allocate capital that you should be able to grow through the dilution in '22 considering European food -- European Tinplate won't be part of the portfolio? Timothy Donahue: So I think that we're -- we had this discussion last quarter because -- and I understand the question, George. We are sometimes as baffled by the outperformance as you are. And as I said last time that the reason why you're not overly ecstatic with it is it could go the other way, and then that's a more difficult conversation. Having said that, I would say, as we look forward to the back half of the year, the amount of available capacity that we have to have an upside earning surprise is significantly limited from where we were in the first quarter or even at the end of the first quarter. And then we are -- it's the Asian COVID situation across several of the countries. There were some lockdowns in Q2, but not to the extent that we were anticipating. We do anticipate that across Asia and some of the markets, we're going to get more lockdowns. We have lockdowns in 2 jurisdictions right now for the next 3 weeks. So that will have an impact. The other thing is transitory inflation. We'll get the inflation back in the formulas next year, but there is some inflation in the business. And having said that, we're earning through it with the growth we have. Looking at the fourth quarter and into next year, do we have enough growth to earn through the dilution from tinplate? Well, I think one of the ways you're going to earn though the dilution from tinplate is buying back a mountain of stock. And it's not clear to me, George, that we're trading on a P/E multiple anyway. So whether we post $7.50 or $7, it's not sure to me that anybody is really looking at an appropriate P/E multiple for our company, and I'd leave it at that. George Staphos: Fair enough. Fair enough, Tim. And for the record, not that it really matters for this call, but I mean your performance was better than expected as was your guidance relative to our model for what it's worth, but just for the record. What are beverage company marketing folks telling you about the outlook for new categories, new product innovation? In other words, is there something else that can take the baton or at least keep up in the race with spiked seltzers? What's your view on that on next categories, if there are any? Or do we have to worry just about or expect just new flavors out of spiked seltzers to be the driver of can growth over the next couple of years? Timothy Donahue: Well, I know of one. I don't want to talk about it because I don't want to expose the idea, which is specific to 1 customer or perhaps a group of customers. But I think we should expect that the marketers are going to continue to try to develop. It doesn't mean they're all going to be successful, but they're going to continue to try to develop new products and new flavors, new mixed cocktails across a variety of whether it's real alcohol-based or some kind of mash of alcohol mixed with a variety of flavors, be it more healthy or less healthy. And that's probably the wrong term to use, but I'll leave it at that. I don't think we see any shortage of ideas coming from them. Historically, we might have been worried about how much we are going to spend on incremental artwork for some of these labels. But given the strength of the market now, we charge for the artwork. So I'm not so worried about incremental artwork that we do that -- if a product fails. But I think the -- as we've said, we continue to maintain the outlook is really strong. And it's -- given the amount of imports we have coming into North America this year, I'm a little bit more bullish on the next 24 months perhaps than I was before because it hasn't really slowed down from last year like I thought it would. George Staphos: My last one and I'll turn it over. Just from some inbound that we've gotten, can you update us on the portfolio and how you look at transit, how you look at North American tinplate relative to the -- its relevance, the importance in the portfolio? And in particular, what you think the trajectory for transit is over the next couple of years? Timothy Donahue: Sure. So the first thing I'll say is that we've pegged August 31 for the tinplate sale for the purposes of the discussion today. We're hopeful that it closes earlier than that. I don't think it's going to close July 31. As we look at the other businesses in the portfolio and specifically to your question, the non-beverage businesses, we've discussed previously that they don't require a lot of capital. The return on capital from those businesses is quite high, and the cash flow generated is quite high. And so to the extent that any organization has a lot of demands on its cash, be it a growth capital in 1 business versus another and/or share buybacks, dividends, return of capital to shareholders, it's important, in our view, to have a well-balanced -- and businesses that generate a lot of cash flow where you just tend the garden, you're not having to plant a lot of trees. And so for the time being, we're running those businesses as efficiently as we can. The -- I would like to have a discussion with all of you at some point. We were able to demonstrate to you the upside to a business like Transit Packaging. But for the time being, we're just going to tend the garden. Operator: The next question is from Gabe Hajde of Wells Fargo Securities. Gabe Hajde: Tim, Tom, I hope that you and everyone that's important is doing well. I'm trying to revisit a question that I think George started to go down the path of recognizing it difficult to talk about some of these topics in a forum like this. But I guess is there anything you can share with us from customer dialogue that gives you comfort that the industry doesn't find itself kind of in a meaningful oversupply situation in 18 to 24 months? And part of it is obviously predicting consumer behavior, but more talking about potential for substrate gains or maybe the multiplier effect of premixed cocktails that maybe were underappreciating similar to kind of what we're observing in Brazil that's happened over time with returnable glass. Timothy Donahue: Yes. So we touched on this a bit last time, Gabe. I think even if we -- even as we come back from the pandemic, I think the spiked seltzers are one thing, right, and mixed cocktails are another. And if you were a bar owner, you think about people going back to a bar first. And if they're going to drink those products, they're going to be served in a can. They're not going to be served -- they're not going to be mixed by the bar tender. And if you were a bar owner, it offers you the opportunity to control inventory and control waste and control theft in a much better way than bottles of alcohol that have to be mixed with seltzer out of a gun, et cetera. So I think from that standpoint, we're not so worried about the reopening. And I think piggybacking on that, when you think about that, it offers a lot of upside to the can into the future. But you're right, you never know what consumer behavior is going to be. I do think there's a large portion of the population not only in the United States, but especially in Europe, where habits have changed post-pandemic -- or we're not really post-pandemic, we're still in it. But -- and it's going to take a longer time for that to return to what we view as historical normal than perhaps we anticipate. But yes, there's always a possibility where, as an industry, we're going to overbuild. And I don't see that happening for the next 2 to 3 years. I think, as I've said and I can only say it so many times, demand is going to far outweigh supply for the next several years. And I don't -- you're not going to scare me right now by telling me some guys doing this or some guys doing that and how do you feel. I -- where we sit today, we know we've got customers banging on door every day looking for more supply. And we're not in the business of telling people no. So we're not worried about it. Gabe Hajde: Okay. And then I guess kind of early indications from on-premise and factory opening and I think kind of going back to the scanner data, something that I don't necessarily think we have great visibility on at least on the sell side is obviously the supply chain is much different in pipeline fill ahead of kind of the July 4 holiday. From our research, I think that was pretty robust. Do you have any visibility in terms of -- or anything you can share with us in terms of kind of where those inventories are? Again, appreciating that, like I said, kind of the Memorial Day holiday I think was somewhat missed just given the timing of reopening across the country. Timothy Donahue: Yes. So I -- it's an interesting question because when cans are in short supply, typically, the customers don't warehouse a lot of cans or warehouse a lot of fill product. But given the cans are in short supply, what I don't have a handle on right now is are they buying ahead and warehousing empty or filled cans for the balance of the summer in the Labor Day because they're worried about supply. That, I couldn't honestly tell you. But I can tell you that the demands on us have only increased from the conversation we had 3 months or 6 months ago. Operator: The next question is from Ghansham Panjabi of RW Baird. Ghansham Panjabi: Tim, what do you think is realistic in terms of the growth rates for the industry specific to the U.S. in '21 versus '20? And then the new plant that you just announced, the 2-line plant, is that for existing product categories, new categories that we just don't know about at this point or a combination of the 2? Timothy Donahue: I would say it's existing and new customers, but existing categories, Ghansham. I'm sorry, what was the first part of the question? Ghansham Panjabi: Just the industry growth rate. Timothy Donahue: The problem is the COVID quarter kind of screws it up, right? So I would tell you that if last year, we had -- what do we have, Tom, 97 billion units? And with imports, we are about 108, 110? Thomas Kelly: 112. Timothy Donahue: 112. Is it reasonable to say that this year, you could have 10% of 112? That seems like a big number. I think it depends on the suppliers' initiation of capacity output. We're -- if we were apples to apples, I'd say that Crown is comfortable with 10% on its base. It could well be that we have 10% this year, but I'd feel more comfortable in the 5% to 7% range as an industry. Ghansham Panjabi: Got it. And then in terms of the obvious, the Delta variant and the impact on lockdowns, et cetera, what are you seeing across the regions real time? And then also in Brazil, I don't think you mentioned much about Brazil, but that country is going to lap some pretty significant comparisons for the back half of the year versus an extraordinary last year. Just your outlook for the back half of the year specific to Brazil as well. Timothy Donahue: Yes. I think -- I mean we're going to remain sold out in Brazil. The only headwind we have in Brazil is how quickly we get the second line up in Rio Verde. Yes. Clearly, the comparisons are much higher in Brazil. If we all had more capacity, it wouldn't matter. We're going to chew up all this new capacity. As quickly as we can make the cans, they're going to be taken by the customers. On the Delta variant or the other miscellaneous variants around the world, we've talked about Asia. And the Asian governments are really trying to restrict the number of new cases. When I say restrict the number of new cases, you take some big Asian cities with several million people, they don't like to have 20 new cases. So that's why the restrictions there are so much different. Now the availability of vaccines and the availability of quality vaccines is much lower across many of these Asian jurisdictions than it is in Europe and the United States. I don't -- I'm not in Europe, and we haven't been able to get to Europe. So I'm going to pass on that for the time being. But I would say in the United States, I don't believe any of the governors want to go back to lockdown. And I would go as far to say to the extent that they were able to use lockdowns for whatever other political purpose they had, they've accomplished that other political purpose. They're not going back to lockdowns at this point. And with some of the bigger cities -- I know we are in Philadelphia, we've got at least 60% to 65% of the people fully vaccinated in the city of Philadelphia. And at some point, perhaps not popular to say, I don't really care. You don't get vaccinated, don't complain when something bad happens to you. There's an opportunity out there for you to be vaccinated and for you to protect yourself and your family. And if you're not willing to do that, that's on you, but don't ask the rest of us to suffer and delay living our lives because you've got some belief one way or the other where you don't want to take the vaccine. It's pretty clear, right? Drug companies aren't trying to kill us. They're trying to extend our lives so they can sell us more drugs. I haven't heard a good reason why people don't get the vaccination. So I don't think, regardless of any of the variants, we might have some cities like Los Angeles that are forcing us to mask up again. I don't think we're going back to any shutdowns in the United States anytime soon. Operator: The next question is from Jeff Zekauskas of JPMorgan. Jeffrey Zekauskas: You spoke about your year-over-year can growth. What was your sequential can growth in beverage? Timothy Donahue: Oh, from Q1 to Q2? Jeffrey Zekauskas: Yes. Timothy Donahue: Oh, boy. Hold on. Thomas Kelly: So Q1 was up 8%. Timothy Donahue: No. No. No. It is -- no. I know that was up 8%, but it's -- that's a... Thomas Kelly: It is the number. Timothy Donahue: That's a meaningless number, right, because it's got COVID quarter last year, right? I think what you really want to know is how many more cans did we sell in the second quarter than the first quarter. Jeffrey Zekauskas: That's it. That's the question. Thomas Kelly: 19.5% in the first quarter. Timothy Donahue: Yes. So what I can tell you is, globally, we're a little over 20% in the -- Tom said 19.5%, but I think it's -- maybe it's 20%, not 19.5%. 19.9% in the second quarter. And maybe for the full year, we're like 13.5%, something like that. So does that give you help? Jeffrey Zekauskas: Okay. I'll take what you're giving. In the quarter, what was EPS from continuing operations? What was... Timothy Donahue: Sorry. What was the question again, Jeff? Jeffrey Zekauskas: Sure. In the second quarter, what was EPS from continuing operations? And what was EBITDA from continuing operations and pro forma if you didn't discontinue the tinplate business? Timothy Donahue: So the EPS is on the schedule, right? Thomas Kelly: Yes. Timothy Donahue: The $2.14? Jeffrey Zekauskas: No. But exclusive of discounts. Thomas Kelly: So the earnings per share from continuing operations was $0.57, discontinued was $0.37 -- I'm sorry, continuing was $0.97, discontinued was a loss of $0.02. But... Jeffrey Zekauskas: No. Adjusted. Timothy Donahue: Yes. It's $2.14. Jeffrey Zekauskas: No. Is it -- does the $2.14, $0.50 in disc ops and $1.64 in continuing operations? Is that the rough order of that? Thomas Kelly: Yes. You've got to be careful with that because you have the pro forma to -- disc ops doesn't mean what we're going to lose, right? You have to back out interest and everything else. Timothy Donahue: Yes. There's no -- on the face of the income statement, when we show you income from discontinued operations, it's not reduced by any interest expense. All the interest expenses up in continuing operations, as required. And your second question was EBITDA for the second quarter from continuing operations? Jeffrey Zekauskas: Right. And pro forma. Timothy Donahue: So I don't have the first quarter press release. So pro forma 12 months June... Jeffrey Zekauskas: I know pro forma 12 months, but the... Timothy Donahue: Yes. So if you had the prior press release, if you backed out... Jeffrey Zekauskas: So it's $559 million for pro forma if you look at the prior numbers. But I don't know if that's correct. Is that the right number? Is it $559 million for the quarter pro forma? Timothy Donahue: No. So what I was trying to say, Jeff, if we look at the first quarter, the -- LTM March EBITDA was $1.917 billion and that has food as continued operations, right? There were no discontinued operations. And pro forma 12 months June is $2.081 billion. So the second quarter, on a -- if we didn't have discontinued operations, the second quarter is $164 million higher than the second quarter last year. It's -- on this call, that's the best I can do for you without spending a lot more time in some other spend. Operator: The next question is from Mark Wilde of Bank of Montreal. Mark Wilde: First of all, Tim, did you provide a capacity number for that new Southern U.S. plant? Timothy Donahue: I would tell you to think about $2.5 billion, very similar to Bowling Green and/or Martinsville. Mark Wilde: Okay. All right. That's helpful. Then in Transit Packaging, when you acquired the business, I think you were pointing to about $85 million or $90 million a quarter in EBITDA. Is that still a reasonable number in your view in light of kind of the efforts you've made to improve the business? Or is it a little higher, a little lower than that going forward? Timothy Donahue: Yes. So I think where we see segment income plus depreciation, we're going to be -- $90 million would be $360 million a year. We're going to be higher than $360 million this year, no doubt. And so we'll see what industrial activity is for the balance of this year and into next year and into '23, but there's no reason why that number shouldn't continue to grow at least at GDP rates until such time that we take a different view on how much we want to try to grow that business. Mark Wilde: And would you say, Tim, just if we look at that second quarter number, were there any pieces of that business that were still cyclically weak? Or is that second quarter number reflect the business is pretty much up and running full? Timothy Donahue: So there's nothing cyclically weak. What is a little depressed is the equipment business just because we're having issues on the supply side from our suppliers getting components and other items. And I estimated that maybe at about $5 million earlier during the call. Demand is exceptionally strong. And as I said earlier, even probably far stronger than we can handle right now with the folks we have in place if we had all the supply, but we don't have all the supply. Mark Wilde: Okay. And last one from me. Is it possible for you to just talk with us broadly about what Crown is doing to help boost the recycling rate for North American beverage cans? I think that's running about 50%. And I just -- I wondered given the energy intensity of aluminum cans, if we continue to landfill 50% of all of them, is this going to somehow threaten the whole sustainability argument around cans if that rate isn't moved over time? Timothy Donahue: Mark, we did this last time, and I -- when I went back and thought about it, a thought crossed my mind that you're a shill for the paper industry. So I'm... Mark Wilde: You're for the business. Timothy Donahue: One thing I feel really good about is the paper guys are never going to find a way to package carbonated beverages. However, your point -- your question is a good question. And you and I had a disagreement on whose responsibility it is. No doubt, the government is going to make it either our responsibility or our customers' responsibility because we don't vote in elections, individuals vote in elections. But if consumers who are individuals don't start properly handling or disposing of products that have real value as aluminum has real value, we're going to have -- we're going to find a different answer. We have talked in the past about higher recycling rates in deposit states versus nondeposit states. And I don't really want to get on one side or the other of that issue because some of our customers have strong feelings of that. However, my view is if we're going to have deposits for aluminum cans, you better start having deposits for everything else that goes into the waste stream. It's not fair to pick on 1 substrate. Mark Wilde: Okay. Fair enough. Timothy Donahue: What is Crown doing? We sponsor a number of efforts around the organization nationally and internationally. And we do it not only individually as a company, but we do it in coordination with the Can Manufacturers Institute as well. Operator: The next question is from Neel Kumar of Morgan Stanley. Neel Kumar: In terms of the 18% segment volume growth year-over-year in Americas Beverage, can you just break down the volume growth in North America, Brazil and Mexico? And then... Timothy Donahue: Yes, I could. I think you're going to have exceptional numbers in Mexico and Brazil because those markets were so depressed last year in the -- that was the COVID quarter and many of our alcohol customers were shut down. The cans -- those -- some of those -- a lot of those cans were made, but they were sold in North America. So I would say the North American number, in the high single digits; the Mexican and Brazil numbers, high double digits. And when I say high double digits, I mean high double digits. Neel Kumar: Okay. Timothy Donahue: As we said earlier -- Neel, as I said earlier, I don't want to characterize some of the growth rates in the second quarter as meaningless. But when we start seeing numbers like that, they're somewhat meaningless because of what the COVID quarter was last year. Neel Kumar: Right. That makes sense. And... Timothy Donahue: Here's what I'd tell you. We looked at -- if we looked at the first half of '21 versus the first half of 2019, Mexico and Brazil are up high single to mid-double digits in that period. So growth is still quite high. And North America, up more than 20% over that period. It's just a -- I think it's a more relevant measurement period than comparing against the second quarter of last year or we can sit here and talk about unbelievable growth rates that mean nothing because you're -- you can't model them forward. Neel Kumar: Right. That makes sense. And then just in terms of beverage can imports, I know you mentioned that Crown's beverage can imports are a bit lower than last year, but it seems that imports for the overall industry are up significantly year-to-date. So I was wondering if you've got an estimate of how many cans potentially imported this year versus 7 billion to 8 billion cans in the quarter of last year. And are you seeing any evidence of beverage customers having independently import cans from abroad as you and the other large businesses are generally sold out? Timothy Donahue: Yes. So if I -- I didn't mean for you to think that we're importing a lot less cans. We're importing a lot of cans this year, again, slightly below what we imported last year. So our -- I don't know what the industry imports were last year, you mentioned a number of $8 billion. If that's the case, we probably imported 25% of those. I can't tell you what the other guys did, but we're still importing an extraordinary amount of cans this year. There are customers out there trying to make their own deals to import cans because we and the other global manufacturers, there's only so much we can do. Operator: The next question is from Alton Stump of Longbow Research. Alton Stump: Actually, of course, the -- I mean you guys pretty much beat every segment versus expectations, but the big surprise to me was the European Bev can volume number and particularly the first half versus first half of '19 being almost as strong as Americas. I guess what drove a certain region where you are seeing strength to drive that huge growth of mid-teens versus first half of 2 years ago? Timothy Donahue: So well, I -- there is growth in the market. And even prior to all this beverage can euphoria, there's been consistent 3% to 5%, 4% to 6% growth across Europe year in and year out for the last decade or 1.5 decades. You couple that with -- we have installed new capacity in -- throughout our European operations, although we don't have anything announced right now. Between '19 and today, we put a new 2-line can plant in Valencia, Spain and a new 1-line can plant in Parma, Italy. So we have new capacity. So that would be -- specific to Crown, that will be the reason why our growth numbers are pretty high compared to the first half of '19. Alton Stump: Great. Makes sense. And then just as you just referenced, you have announced new capacity. I guess how soon might that be coming? Or how big is the need over the next 12 to 18 months to add capacity in Europe in your view? Timothy Donahue: I don't -- I -- we'll -- I don't want to -- I guess we're not going to talk about that right now. We'll let you know in due time. Operator: The next question is from Anthony Pettinari of Citigroup. Anthony Pettinari: At the Analyst Day, you talked about expectations to grow global beverage can volumes I think by 10% in 2021. I think in your response to Jeff, you talked about maybe being able to grow 13% plus, if I heard that right. And so that's the first question. And then to the extent that there has been that change in view, is it primarily driven by better-than-expected demand? Or is it really driven more by better operations in terms of getting some of these plants up earlier than expected and running well? Timothy Donahue: Well, so what we said was -- I think Jeff was asking the rate of growth in the second quarter versus the first quarter. And what we said was the second quarter was up about 20%. And year-to-date June, we're up about 13% or 13.5%. So clearly, the second half -- second quarter had higher growth than the first quarter, some of which is due to COVID. I still think we're going to grow in the third and fourth quarter, but those growth rates in the third and fourth quarter will not match the growth rate in the second quarter because of the comparison to COVID. So I think perhaps on a global basis, perhaps 10% or 11% is still a reasonable number. Anthony Pettinari: Okay. Okay. That's helpful. And then we've read about increases in construction costs, whether it's materials or steel or labor. When you look at the cost of constructing and staffing a greenfield bev can plant, maybe compared to a couple of years ago, is it up 10%, 15%? Is there any kind of rough -- any kind of color you can give us on that? And then in terms of impact or risk from rising construction costs to CapEx guidance and maybe the longer-term CapEx goals that you articulated at the Analyst Day, any thoughts there? Timothy Donahue: So I -- where we sit today, and it's plant specific because it's -- we expect some of this will -- I don't know if the steel guys are at their apex yet, but they might be at their apex. But as we sit today -- if I sat down to sketch out a plant cost today versus what we thought a plant was going to cost us to build 2 or 3 years ago, it could be 20% to 25% higher today than it was 2 or 3 years ago. I don't think we're going to stay at that level over the next several years. So I don't think we need to adjust our long-term capital planning to take that into account. I think we're going to get a reversion on some of that. The risk to the company by spending an extra $30 million or $40 million to build a factory today versus 2 or 3 years ago, I think you need to look at that risk over a 40- to 50-year period because when you build a factory for beverage cans, you plop it down in a place. And as we've said before, it's not like moving a call center, right? It's not like moving all you fellows out of New York City to Hoboken. You're not going to move a can plant. So that plant is going to be there for 40 or 50 years. So we're not going to get overly excited. We don't like it, but we're not going to get overly excited nor change our strategy as relating to trying to service our customers. Operator: The next question is from Adam Samuelson of Goldman Sachs. Adam Samuelson: A lot of ground has been covered. I just want to clarify, so on the guidance, in your -- one of the other comments, you mentioned that about $0.20 or -- of the $0.25. So increase in the implied second half guidance is really a reflection on the treatment of the divestiture and the timing impact. And then separately, you just said that in May, you thought global can volumes for the year would be up 10%. And you thought that was still a pretty good estimate, maybe 10% to 11%. I'm just trying to make sure I'm characterizing that right, especially given the magnitude of the second quarter outperformance. And so is the view -- have you tempered your second half volumes if you exceeded the full year range by so much in the second quarter? Just trying to make sure I'm comparing apples to apples there. Timothy Donahue: No. But the comparisons in the second half are much different than the comparisons in the first half, specifically the second quarter, right? You've got growth rates in some of the locations that were severely impacted by COVID last year in the second quarter. You're not going to have those same growth rates in the second half because those markets came back in the second half of last year. So while there's still going to be a very good growth in the second half, you just can't have another COVID quarter nor do we want another COVID quarter. Adam Samuelson: That, I get. I'd just maybe frame differently then. Is it that in the guidance that you've given for both the second quarter and frankly, if you're going back to -- for the first quarter, which you've meaningfully exceeded in both cases, is the real variance you had left a good amount of kind of volume contingency out of your formal guidance because you were uncertain about the macro and ultimately, mobility was good, demand was good and operations ran well that you were able to outperform your initial expectations in both the first and second quarter? Timothy Donahue: Yes. I think we're doing our best to bring capacity on as quickly and as efficiently as possible. It's -- and if we're up 13.5% through 6 months, maybe for the full year, we're going to be up 11.5% or 12% or 13%. As I sit here today, I'm telling you 10% or 11%. It's just -- it really depends on how quickly we can get the capacity up and running and how efficient the factory is when it comes up and running. We have a lot of capacity coming up in the second half. And I have no doubt that whatever we bring to market, we're going to fully sell out. It's just a -- it's a function of how quick we can get it up. Operator: The next question is from Adam Josephson of KeyBanc. Adam Josephson: Tim and Tom, hope you're well. Just a couple of guidance questions. Tom, just on the buyback, can you clarify what you're expecting to buy back this year? Is it just the $379 million or an amount significantly greater than that as part of your full year guidance? Thomas Kelly: As Tim was saying, we're kind of solving for the leverage. So we want the leverage to be 3 to 3.5, pick the midpoint of that. We'll buy back stock such that we're about 3.25. So the $379 million, there will be more to come as we go through the last 6 months. Adam Josephson: Got it. Okay. And Tim, on the 3Q guidance, a similar question to what came up on the last call, which is normally your 3Q earnings are higher than your 2Q earnings. I know you're losing a few cents I assume in September from European -- the presumed absence of European Tinplate. But can you just, again, remind me or help me understand why the implied sequential earnings decline? I know you said that you think you'll have some production constraints, which I think you thought as well going into the second quarter. You talked about inflation, but I think you also talked about inflation -- your expectation of inflation last quarter. And obviously, you ended up beating your guidance quite significantly. Timothy Donahue: We've modeled and given you a forecast assuming we keep European Tinplate through August. For most of you who followed us for some time, you know the European Food business is heavily weighted to the third quarter and it's heavily weighted to September. So that's a fairly good sized number. I think that as we sit here, there are areas where inflation -- there is inflation in the business, and it's -- it will take us until we get the contract risers the opportunity to do that next year to recover that. And I hope we're being a bit cautious, but we'll see, right? It's just -- it's -- as I said earlier that one of the big things, Adam, is that the available capacity in the third quarter to outperform what you or I would forecast the available capacity is lower because you've already built into your forecast that you're going to sell everything and more that you can make in Q3. Adam Josephson: Got it. I appreciate that, Tim. And just longer term, one on CapEx. So I think you talked about $900 million this year and obviously, you just announced new plants come '23-ish. Is there any reason to expect a decline in CapEx from this year's presumed levels of $900 million over the next, call it, 2, 3 years? Timothy Donahue: So I think there's -- I think as I sit here today, I could comfortably tell you that we expect to spend similar or more next year. Beyond that, I -- my crystal ball is not that good. So we'll see. Adam Josephson: And Tim, just one last one on the cash flow issue. Just given the new assumed closing date of the deal, any thoughts on what your cash flow might look like? I know working capital is going to be messed up. There are other issues that are going to be messed up. But any thoughts on what cash flow is likely to look like given these myriad issues? Timothy Donahue: Yes. So again, the food business, a lot of shipments over the summer, and the cash flow is lower because you lose the earnings from the business for the last 4 months. Not only that, but the working capital true-up with the buyer happens within the purchase price mechanism, not through the cash flow statement, not through free cash flow. So I think, again, I don't like to use the term meaningless, but it's not something that's meaningful for modeling purposes going forward. Operator: The next question is from Phil Ng of Jefferies. Philip Ng: I guess you mentioned, Tim, your outlook for the next 24 months a bit more bullish than you previously thought. It sounds like maybe you're a little less worried about the reversal from a reopening dynamic. But any more color on why you're a little more upbeat than you were, call it, 3 to 6 months ago on the demand side? Timothy Donahue: Well, two reasons. The one is that the customer requests for cans have not subsided at all. In fact, they're increasing. And the level of imports that we and others are bringing in, again, are not really subsiding. And just as we talk to customers and just think about what a reopening might look like or a delayed reopening might look like, it just gives you a little bit more confidence that even in a full reopening, it's -- the growth rates are going to far outweigh any impact from a reopening. Philip Ng: Got it. Were there any pockets that were more stronger, of bigger contribution? Is it any of these new products that we might not be as close to? Spiked seltzer seems to be a little -- has moderated a little bit and maybe the reopening piece. I'm just trying to flesh out whether there are any variables and -- or your customer base where you've seen a little stronger demand than you previously expected. Timothy Donahue: Yes. So obviously, they're not going to have the same growth rates that they've had in the past, right? They've had tremendous growth rates, but they're growing off a much larger base. So from the standpoint -- from a can company standpoint, there's still significant unit volume growth. And sometimes we get hung up on growth rates and we forget about absolute unit volume growth and the contribution we get from that. There -- the demand has been across all products. Without saying something I don't want to say, I'll just leave it at that. Philip Ng: Okay. That's helpful. And then when we think about the back half of your guidance, a few of my peers have just mentioned that maybe the guidance looks a little more conservative and there's different reasons why you're accounting for that. And you mentioned maybe the capacity constraints provides a little more limitation for big upside surprises like we've seen in the first half. Appreciating you have some of that capacity coming on later this year, but when do you kind of expect that capacity kind of hit its full stride where you would have more optionality for upside? Is that early next year? But just any more color around that would be really helpful. Timothy Donahue: Yes. I'd like to think we're -- and we are getting better, and I'd like to think we are getting better at bringing lines on and getting up through learning curve quicker and better than we have in the past. I think we are doing that. We have some locations around the world that do it much better than others. So far, it feels like the first line in Bowling Green is going real well. Now are they able to continue that advancement through learning curve as well as they're doing on the first line when you complicate the plant and you bring up the second line at the same time? We'll see. So typically, we like to tell you that it takes us about 12 months to get through full learning curve. Some of the factories do better, as I said. And the only thing I can tell you is I know that all the teams are trying as hard as they can. Operator: Our last question is from Salvator Tiano of Seaport Research Partners. Salvator Tiano: Just wanted to check a little bit on the new start-ups. Firstly, I was under the impression that some of them were scheduled for Q3. So I want to confirm that they are being delayed by a few months as most of the start-ups are now in Q4. And secondly, as we think about the start-up expenses, do you expect most of them to align with the calendar of the start-up, say, Q4? Or with the hiring and training in advance, could Q3 include a lot more start-up costs than Q4? How should we think about that? Timothy Donahue: So you are correct in saying that there's been a small slippage in bringing some of the factories up maybe a month or 2 from late Q3 into early Q4. Some of that has to do with raw material supply, building supply, somewhat frank -- quite frankly, has to do with the fact that we're right in the middle of the season, and we're trying not to disrupt the plant from running at the highest efficiency it can possibly run at. On start-up costs, the only thing I'm going to tell you is we don't talk about the impact of start-up cost. We've been building plants, greenfield plants for well over 20 years. We've added significant greenfield capacity to our platform globally in every market. It's something we do and it's just something that's embedded in the forecast that Tom has provided you. So I don't think I have an answer for you as to whether there's more or less. It's part of the business when you bring up factories. And we're going to have enough growth and enough positive things happen that we don't need to talk about the impact from start-up costs. Salvator Tiano: Yes. I guess I think in the past, you've mentioned also that you do not provide an explicit dollar number. My question here would be more about the timing. As we try to model it on our own and make our own assumptions, should we think that because these are early Q4 start-ups that a lot of the start-up costs will happen in Q3? Or should we think that no, it's going to be in Q4 regardless of what amount? Timothy Donahue: If you're going to model it -- if you're starting to plan up in Q4, you're going to have a little bit of training and other expenses in Q3, and then you're going to have some -- as the plant comes up through learning curve, you've got significant expenditures in Q1 and Q2 and so you get to breakeven. And that's just all part of the number that you're seeing. I let you guys model how you want to model. So Harley, I think you said that was our last call. Thank you very much, Harley. And for all of you, that will conclude our call today. Thank you for joining us. We look forward to speaking with you again in October. Bye now. Operator: Thank you, speakers. And that concludes today's conference call. Thank you all for joining. You may now disconnect.
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Crown Holdings, Inc. (CCK) - A Strategic Insider Sale and Value Proposition

  • Madeksza Matt, President of Transit Packaging at Crown Holdings, sold 1,500 shares at $99 each but still holds 41,302 shares, indicating continued confidence in the company.
  • Crown Holdings is rated as a top value stock by Zacks Investment Research, with strong financial metrics supporting its value proposition.
  • The company's financial ratios, such as a price-to-earnings (P/E) ratio of 21.12 and a debt-to-equity ratio of 2.47, highlight its profitability and reliance on debt financing, respectively.

Crown Holdings, Inc. (NYSE:CCK) is a prominent player in the packaging industry, specializing in the production of metal packaging products for consumer goods. The company operates globally, providing innovative packaging solutions to a wide range of industries. Crown Holdings competes with other major packaging companies, striving to maintain its position as a leader in the market.

On June 6, 2025, Madeksza Matt, President of Transit Packaging at Crown Holdings, sold 1,500 shares of the company's common stock at $99 each. Despite this sale, Matt still holds 41,302 shares, indicating a significant personal investment in the company. This transaction reflects a strategic decision by an insider, which can often provide insights into the company's future prospects.

Crown Holdings is recognized as a top value stock for long-term investment, as highlighted by Zacks Investment Research. The Zacks Style Scores system rates stocks based on value, growth, and momentum, helping investors identify stocks with strong potential. Crown Holdings' strong ratings make it an attractive option for those seeking long-term value in their investment portfolios.

The company's financial metrics further support its value proposition. With a price-to-earnings (P/E) ratio of 21.12, investors are willing to pay $21.12 for every dollar of earnings, indicating confidence in the company's profitability. The price-to-sales ratio of 0.97 suggests that the market values the company's sales at nearly the same level as its market capitalization, reflecting a balanced valuation.

Crown Holdings' enterprise value to sales ratio of 1.46 and enterprise value to operating cash flow ratio of 13.35 provide additional insights into its valuation. These metrics indicate how the company's total valuation compares to its sales and cash flow from operations. Despite a higher debt-to-equity ratio of 2.47, which shows reliance on debt financing, the company's earnings yield of 4.73% offers a reasonable return on investment. However, a current ratio of 0.87 suggests potential challenges in covering short-term liabilities with short-term assets.

Crown Holdings, Inc. (NYSE:CCK) Executive Sells Shares Amid Strong Financial Performance

  • Executive Vice President and COO of Crown Holdings, Inc. (NYSE:CCK) sold 7,000 shares at approximately $96.995 each but still retains a significant stake in the company.
  • Q1 2025 financial performance exceeded expectations with an adjusted EPS of $1.67, driven by increased beverage can shipments and manufacturing efficiencies.
  • The company's net sales reached $2.89 billion and it has raised its full-year earnings outlook for 2025, reflecting confidence in continued strong performance.

Crown Holdings, Inc. (NYSE:CCK) is a leading player in the packaging industry, specializing in the production of metal packaging for food, beverage, household, and industrial products. The company operates globally, with a strong presence in the Americas and Europe. Crown Holdings competes with other major packaging companies like Ball Corporation and Ardagh Group.

On May 2, 2025, Gifford Gerard H, the Executive Vice President and Chief Operating Officer of Crown Holdings, sold 7,000 shares of the company's common stock at approximately $96.995 each. Despite this sale, he still holds 135,014 shares, indicating a significant personal investment in the company. This transaction comes on the heels of Crown Holdings' impressive financial performance in the first quarter of 2025.

Crown Holdings reported adjusted earnings per share (EPS) of $1.67 for Q1 2025, surpassing the Zacks Consensus Estimate of $1.22 by 37%. This strong performance was driven by increased beverage can shipments and improved manufacturing efficiencies. The company's earnings from continuing operations were $1.65 per share, a significant increase from 56 cents in the same quarter last year.

The company's net sales for the quarter reached $2.89 billion, slightly exceeding the Zacks Consensus Estimate of $2.87 billion. This growth was primarily due to higher beverage can volumes. As a result of these positive outcomes, Crown Holdings has raised its full-year earnings per share outlook for 2025, signaling confidence in its future performance.

Crown Holdings' financial metrics provide further insight into its market position. The company has a price-to-earnings (P/E) ratio of approximately 20.6, indicating investor confidence in its earnings potential. However, with a debt-to-equity ratio of about 2.39, the company carries a higher level of debt compared to equity, which may pose financial risks. Despite this, the company's earnings yield of approximately 4.85% suggests a solid return on investment for shareholders.

Crown Holdings, Inc. (NYSE:CCK) Executive Sells Shares Amid Strong Financial Performance

  • Executive Vice President and COO of Crown Holdings, Inc. (NYSE:CCK) sold 7,000 shares at approximately $96.995 each but still retains a significant stake in the company.
  • Q1 2025 financial performance exceeded expectations with an adjusted EPS of $1.67, driven by increased beverage can shipments and manufacturing efficiencies.
  • The company's net sales reached $2.89 billion and it has raised its full-year earnings outlook for 2025, reflecting confidence in continued strong performance.

Crown Holdings, Inc. (NYSE:CCK) is a leading player in the packaging industry, specializing in the production of metal packaging for food, beverage, household, and industrial products. The company operates globally, with a strong presence in the Americas and Europe. Crown Holdings competes with other major packaging companies like Ball Corporation and Ardagh Group.

On May 2, 2025, Gifford Gerard H, the Executive Vice President and Chief Operating Officer of Crown Holdings, sold 7,000 shares of the company's common stock at approximately $96.995 each. Despite this sale, he still holds 135,014 shares, indicating a significant personal investment in the company. This transaction comes on the heels of Crown Holdings' impressive financial performance in the first quarter of 2025.

Crown Holdings reported adjusted earnings per share (EPS) of $1.67 for Q1 2025, surpassing the Zacks Consensus Estimate of $1.22 by 37%. This strong performance was driven by increased beverage can shipments and improved manufacturing efficiencies. The company's earnings from continuing operations were $1.65 per share, a significant increase from 56 cents in the same quarter last year.

The company's net sales for the quarter reached $2.89 billion, slightly exceeding the Zacks Consensus Estimate of $2.87 billion. This growth was primarily due to higher beverage can volumes. As a result of these positive outcomes, Crown Holdings has raised its full-year earnings per share outlook for 2025, signaling confidence in its future performance.

Crown Holdings' financial metrics provide further insight into its market position. The company has a price-to-earnings (P/E) ratio of approximately 20.6, indicating investor confidence in its earnings potential. However, with a debt-to-equity ratio of about 2.39, the company carries a higher level of debt compared to equity, which may pose financial risks. Despite this, the company's earnings yield of approximately 4.85% suggests a solid return on investment for shareholders.

Insider Selling at Crown Holdings Amid Q1 Financial Results

Insider Selling at Crown Holdings Raises Eyebrows

On April 30, 2024, Timothy J. Donahue, the director and President & CEO of Crown Holdings, Inc. (CCK:NYSE), made headlines by selling 22,500 shares of the company's common stock at a price of $85.18 each. This transaction reduced his stake in the company to 616,178 shares, as detailed in a Form 4 filing with the SEC. This move by a high-ranking insider caught the attention of investors and market analysts alike, especially considering the timing coincided with the company's latest financial disclosures.

Crown Holdings, a key player in the Containers - Metal and Glass industry, reported its financial results for the first quarter of the year, revealing a mix of challenges and achievements. Despite a nearly 6% drop in net sales to around $2.8 billion from the previous year's $2.97 billion, the company managed to exceed earnings expectations. This decline in sales was attributed to strategic agreements allowing for the passing of material cost fluctuations to customers, which, while impacting sales figures, also demonstrated Crown Holdings' adaptability in managing its operational costs. The company reported quarterly earnings of $1.02 per share, surpassing the Zacks Consensus Estimate of $0.96 per share, yet marking a decrease from the previous year's earnings of $1.20 per share.

The financial performance also highlighted a nearly 24% decrease in net income to $93 million, translating to earnings per share (EPS) of $0.56. Despite this downturn, the results met analyst expectations, indicating that the company's financial health was within anticipated ranges. Crown Holdings' ability to maintain its full-year adjusted EPS guidance amidst these challenges reflects management's confidence in the company's resilience and strategic direction. This confidence is further underscored by the company's operational achievements, such as a 2.5% increase in beverage-can shipments, pointing to growth opportunities in this segment.

However, the financial disclosures also painted a picture of a company navigating through significant headwinds. The decrease in segment income, primarily due to lower volumes in most of the company's businesses and increased corporate costs, including those related to a facility fire, underscores the operational challenges faced. Despite these hurdles, Crown Holdings' strategic focus on the global beverage sector and its ability to manage material cost fluctuations through customer agreements have been crucial in mitigating the impact on its financial performance.

Crown Holdings' financial metrics provide a comprehensive view of its market valuation and financial health. With a price-to-earnings (P/E) ratio of approximately 21.84, investors are shown the premium they pay for the company's earnings, reflecting a moderate valuation in the current market context. The company's debt-to-equity (D/E) ratio of 3.12 indicates a significant reliance on debt financing, a factor that investors often scrutinize for potential risks. However, the current ratio of about 1.15 suggests that Crown Holdings maintains a balanced approach to managing its short-term liabilities with its assets, an important indicator of financial stability. These metrics, combined with the company's strategic operational adjustments and market positioning, offer a nuanced understanding of Crown Holdings' financial landscape following its latest quarterly report.

Crown Holdings Price Target Raised to $122 at RBC Capital

RBC Capital analysts raised their price target on Crown Holdings, Inc. (NYSE:CCK) to $122 from $120, noting they remain favorable on the company despite the recent weakness in bev can reflected by peers announcing capacity rationalization and project delays.

The analysts view the company’s bev can category exposure as more favorable vs. peers, and therefore believe it is less exposed to the recent bev can volume declines.

Overall, the analysts expect the company to achieve its free cash flow guidance of approximately $400 million in fiscal 2022 assuming around $1 billion of capex (potentially lower due to supply chain headwinds) and then free cash flow generation should inflect higher in 2024/2025 post growth projects.

Crown Holdings Price Target Raised to $122 at RBC Capital

RBC Capital analysts raised their price target on Crown Holdings, Inc. (NYSE:CCK) to $122 from $120, noting they remain favorable on the company despite the recent weakness in bev can reflected by peers announcing capacity rationalization and project delays.

The analysts view the company’s bev can category exposure as more favorable vs. peers, and therefore believe it is less exposed to the recent bev can volume declines.

Overall, the analysts expect the company to achieve its free cash flow guidance of approximately $400 million in fiscal 2022 assuming around $1 billion of capex (potentially lower due to supply chain headwinds) and then free cash flow generation should inflect higher in 2024/2025 post growth projects.

Crown Holdings Price Target Raised to $122 at RBC Capital

RBC Capital analysts raised their price target on Crown Holdings, Inc. (NYSE:CCK) to $122 from $120, noting they remain favorable on the company despite the recent weakness in bev can reflected by peers announcing capacity rationalization and project delays.

The analysts view the company’s bev can category exposure as more favorable vs. peers, and therefore believe it is less exposed to the recent bev can volume declines.

Overall, the analysts expect the company to achieve its free cash flow guidance of approximately $400 million in fiscal 2022 assuming around $1 billion of capex (potentially lower due to supply chain headwinds) and then free cash flow generation should inflect higher in 2024/2025 post growth projects.