Ball Corporation (BALL), mcap=$18bn, price $57.54 vs $52.49

BALL pitch:
– Beverage can producer with a 30% market share globally and 40% in the US.
– Primary customers are companies like $BUD and $KO.
– The stock sold off due to a combination of post-covid oversupply in the beverage can industry, increased aluminum prices, and moderating consumer demand.
– Operating margins contracted from 13% in 2020 to 10% in 2022.
– These factors are set to unwind in 2023 setting up the perfect storm for BALL.
– The supply/demand disbalance is expected to normalize in 2023, while decreases in aluminum prices are expected to bring margins to historical levels.

BALL valuation:

– EPS is expected to reach $3.5/share in 2023 (7% above consensus).
– Historical 20x multiple implies a $70/share price target.

Exp. gain: +33% to $70/share.

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