uploads/2016/06/bery-pm.png

Barclays Rated Berry Plastics Group as ‘Overweight’

By

Updated

Price movement of Berry Plastics

Berry Plastics Group (BERY) has a market cap of $4.6 billion. It rose by 1.3% to close at $37.48 per share on June 15, 2016.

The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.3%, -3.4%, and 3.6%, respectively, on the same day. This means that BERY is trading 3.2% below its 20-day moving average, 0.53% above its 50-day moving average, and 10.5% above its 200-day moving average.

Article continues below advertisement

Related ETF and peers

The Vanguard Materials ETF (VAW) invests 0.65% of its holdings in Berry Plastics. The ETF tracks a broad market-cap-weighted index of US materials companies. The YTD price movement of VAW was 10.6% on June 15, 2016.

The market caps of Berry Plastics’s competitors are as follows:

  • Sealed Air Corporation (SEE) — $9.1 billion
  • Bemis Company (BMS) — $4.7 billion
  • AptarGroup (ATR) — $4.8 billion

Berry Plastics’s rating

Barclays has initiated the coverage of Berry Plastics Group with an “overweight” rating and also set the stock price target at $45.00 per share.

Article continues below advertisement

Performance in fiscal 2Q16

Berry Plastics (BERY) reported fiscal 2Q16 net sales of $1.6 billion—a rise of 31.9% compared to net sales of $1.2 billion in fiscal 2Q15. The sales of consumer packaging and engineered materials segments fell by 4.5% and 3.5%, respectively, in fiscal 2Q16—compared to fiscal 2Q15. The company’s cost of goods sold as a percentage of net sales fell by 3.4%. Its operating income rose by 47.3% in fiscal 2Q16—compared to the same period last year.

Its net income and EPS (earnings per share) rose to $59.0 million and $0.47, respectively, in fiscal 2Q16—compared to $38.0 million and $0.31, respectively, in fiscal 2Q15. It reported adjusted EPS of $0.58 in fiscal 2Q16—a rise of 38.1% compared to fiscal 2Q15.

Berry Plastics’s cash and cash equivalents fell by 7.0% and its inventories rose by 34.5% in fiscal 2Q16—compared to fiscal 4Q15. It reported adjusted free cash flow of $90.0 million in fiscal 2Q16—a rise of 26.8% compared to fiscal 2Q15.

Projections

The company made the following projections for fiscal 2016:

  • It expects operating earnings before interest, tax, depreciation, and amortization (or EBITDA) of $1.2 billion.
  • It expects free cash flow of $475 million. This guidance includes cash flow from operating activities of $817 million less $285 million of net additions to property, plant, and equipment and the $57 million tax receivable agreement payment.
  • It expects synergy of $80 million from the acquisition of Avintiv.

Now, we’ll discuss Michael Kors Holdings.

Advertisement

More From Market Realist