Berry Global Group Inc. reported strong results for their first fiscal quarter of 2023, with 3% operating EBITDA growth and 11% adjusted earnings per share growth. CEO Tom Salmon noted that the company has taken proactive pricing actions, invested in cost reduction projects, and worked diligently on cost productivity across all of their businesses. Additionally, the company has repurchased another $178 million of shares outstanding and lowered their long-term leverage target to 2.5x to 3.5x net debt to adjusted EBITDA.
Furthermore, Berry Global (NYE:BERY)reaffirmed their guidance provided on their last earnings call, which includes an 8% EPS growth target at the midpoint and strong free cash flow generation. The company also plans on returning $700 million or more to shareholders via share repurchases and dividends in the upcoming fiscal year.
In their most recent earnings call, CEO Tom Salmon stated, “We remain focused on driving consistent, dependable, and sustainable organic growth and continue to invest in each of our businesses to build and maintain our world-class low cost manufacturing base with an emphasis on key end markets, which offer greater potential for differentiation and long-term growth, such as healthcare and the pharmaceutical markets. Additionally, we will continue to invest and expand our emerging market position in support of our commitment to global growth.”
Berry Global Group Inc Stock Analysis:
According to 16 analysts, the average target price for Berry Global Group Inc’s stock is USD 67.86 in the next 12 months. The average analyst ratings is “Buy” and Stock Target Advisor’s own analysis of Berry Global Group Inc is “Neutral”, based on 6 positive signals and 6 negative signals. The last closing price for Berry Global Group Inc’s stock was USD 64.30. In the past week, the stock price has increased by 4.42%; in the last month, it has increased by 3.52%; and in the last year, it has increased by 4.55%.
What we like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior risk adjusted returns
This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.
Low volatility
The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
What we don’t like:
Below median total returns
The company has under performed its peers on annual average total returns in the past 5 years.
Below median dividend returns
The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cashflow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Poor capital utilization
The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.
Poor return on assets
The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Low Earnings Growth
This stock has shown below median earnings growth in the previous 5 years compared to its sector.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
