As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at industrial packaging stocks, starting with Avery Dennison (NYSE:AVY).
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 8 industrial packaging stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.9%.
In light of this news, share prices of the companies have held steady as they are up 2.6% on average since the latest earnings results.
Avery Dennison (NYSE:AVY)
Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Avery Dennison reported revenues of $2.15 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.
“We delivered a strong first quarter, in-line with expectations,” said Deon Stander, president and CEO.
Avery Dennison Total Revenue
Interestingly, the stock is up 1.5% since reporting and currently trades at $177.55.
Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Ball reported revenues of $3.10 billion, up 7.8% year on year, outperforming analysts’ expectations by 6.7%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue and adjusted operating income estimates.
Ball Total Revenue
Ball achieved the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $51.76.
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Graphic Packaging Holding reported revenues of $2.12 billion, down 6.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations.
Graphic Packaging Holding delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 10.7% since the results and currently trades at $22.59.
Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Silgan Holdings reported revenues of $1.47 billion, up 11.4% year on year. This print lagged analysts' expectations by 0.6%. Overall, it was a slower quarter as it also produced a slight miss of analysts’ organic revenue and EBITDA estimates.
The stock is up 3.8% since reporting and currently trades at $54.45.
Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.
Sealed Air reported revenues of $1.27 billion, down 4.3% year on year. This result surpassed analysts’ expectations by 0.5%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
Sealed Air delivered the highest full-year guidance raise among its peers. The stock is up 15.9% since reporting and currently trades at $31.89.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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