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2 Stocks to Watch in the Prospering Glass Products Industry
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The Zacks Glass Products industry is poised to benefit from the rising demand for glass, both as a packaging option and for use in construction. This is backed by its endless recyclability and sustainability benefits. Growing demand for energy-efficient, smart windows or smart glass panels will be another catalyst for the industry going forward.
Companies like Apogee Enterprises (APOG - Free Report) and Xinyi Glass (XYIGF - Free Report) are expected to gain from efforts to capitalize on this demand by boosting capacity and introducing innovative products to the market.
About the Industry
The Zacks Glass Products industry comprises companies that manufacture and sell glass products. One company produces glass containers for packaging beverages, food and pharmaceuticals. Another player in the industry offers coated and high-performance glass used in customized window and wall systems. The same company caters to the construction industry, ranging from commercial and multi-family residential to institutional buildings. It also provides coated glass for picture framing, wall décor and display applications. One company offers smart glass windows using artificial intelligence to adjust and suitably increase access to natural light while minimizing heat and glare. Another company developed an electrokinetic technology that can be retrofitted on any glass, enabling buildings to cut energy consumption and save on heating and cooling costs.
Major Trends Shaping the Future of the Glass Products Industry
Glass Packaging Gaining Popularity: Glass is increasingly becoming the packaging choice for customers, given its endless recyclability without a loss in quality. More than 80% of recycled bottles are used in making new bottles. This also helps negate the need for raw materials. Every ton of recycled glass saves 1,400 pounds of sand, 430 pounds of soda ash and 400 pounds of limestone/dolomite. As consumers are becoming more aware of their environmental footprint, a sharp spike in demand is noticed for refillable bottles, which offer the most sustainable and economical rigid packaging option. Manufacturers are focusing on improving their products by reducing the weight of the bottles for more convenient handling. Also, premium cosmetic and beverage brands are opting for glass to differentiate their products through packaging and ensure quality maintenance. Per Statista, the global market value of glass containers and bottles is expected to reach $65 billion in 2024 and surge to $110 billion in 2034 at a Compound Annual Growth Rate (CAGR) of 5.3%.
Demand in the Construction Sector Holds Promise: In recent years, the use of glass gained popularity in construction as a sustainable alternative to traditional building materials, including wood and bricks, owing to its cost-effectiveness, lightweight, immense strength and environmentally friendly factor. Glass increases the influx of natural light in the building, reduces energy consumption, minimizes carbon emissions and enhances the aesthetic appeal of structures. Rising construction activities across the residential, commercial and industrial sectors are likely to fuel the glass products industry’s growth. Increasing investments in the renovation or modernization of the existing infrastructure will also drive the industry’s growth. Various governments are introducing favorable policies and granting incentives to promote green construction to minimize greenhouse emissions and energy consumption, which bodes well for the industry. The global construction glass market is expected to be $112 billion in 2024 and register a CAGR of 5.2% to reach $144.3 billion by 2029.
Technological Innovation is the Key: Some players revolutionized the industry by bringing smart glass panels or smart windows to the market. These innovative products are designed to enable people to lead healthier and more productive lives by increasing access to daylight and views while minimizing glare and heat from the sun and keeping occupants comfortable. These products also help cut down on energy consumption from lighting and HVAC, thus reducing carbon emissions. The Inflation Reduction Act of 2022, already signed into law, will be a game changer for the industry as it includes a 30-50% Investment Tax Credit for smart windows.
Pricing, Improving Efficiency to Offset Cost Inflation: The industry is witnessing rising costs for transportation, chemical and fuel, and supply-chain headwinds. Therefore, industry players are increasingly focusing on pricing actions and cost reduction and resorting to automation in manufacturing to boost productivity and efficiency.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Glass Products industry is a 5-stock group within the broader Industrial Products sector. The industry currently carries a Zacks Industry Rank #37, which places it in the top 15% of the 251 Zacks industries.
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bullish prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. In a month, the industry’s earnings estimate for the current year has gone up 2%.
Before we present a few Glass Products stocks for investors’ consideration, it is worth looking at the industry’s stock-market performance and its valuation picture.
Industry Versus S&P 500 & Sector
The Glass Products industry has underperformed the S&P 500 and the sector in the past year. The stocks in this industry have collectively declined 31.3% against the Industrial Products sector’s gain of 8.8%. The S&P 500 composite has risen 27.8% during the said time frame.
One-Year Price Performance
Industry's Current Valuation
Based on the trailing 12-month EV/EBITDA ratio, a commonly-used multiple for valuing Glass Products companies, we see that the industry is currently trading at 3.52X compared with the S&P 500’s 20.09X and the Industrial Products sector’s 16.14X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry traded as high as 9.42X and as low as 2.33X, the median being 5.96X.
2 Glass Products Stocks to Keep an Eye on
Apogee: The company recently reported first-quarter fiscal 2025 results, showcasing a solid 37% improvement in earnings. APOG’s efforts to improve efficiency, cost management efforts and productivity gains drove the significant expansion in margins in the quarter. Apogee raised its adjusted earnings per share guidance for the fiscal 2025 to a range of $4.65-$5.00 from the previous guidance of $4.35-$4.75. The midpoint of the new range indicates year-over-year growth of 1%. In January 2024, APOG announced strategic actions (referred to as Project Fortify) to streamline its business operations, improve cost structure, and better position the company for profitable growth. Based on these developments, APOG’s shares have gained 14.6% year to date. Project Fortify is expected to deliver annualized cost savings of $12-$14 million. Approximately 60% of these savings will be realized in the fiscal 2025 and the rest in the fiscal 2026. The company’s solid liquidity position, coupled with a strong free cash flow, also places it well for growth.
The Zacks Consensus Estimate for Apogee’s current year’s earnings moved north 7% in the past 30 days. The consensus mark indicates year-over-year growth of 1.9%. This Minneapolis, MN-based entity has a trailing four-quarter earnings surprise of 23.4%, on average. Apogee currently sports a Zacks Rank #1 (Strong Buy).
Xinyi Glass: The company is expected to benefit from the ongoing improvement in demand for architectural and automobile glass products in its overseas markets. It continues to boost its overseas sales portfolio and expand overseas businesses to consolidate its leadership and competitive advantages in the industry. The company continues to invest in research and to develop and launch a range of unique glass products with different colors, thicknesses, special coating materials, high value-added features and parts, accessories and specialties. Focus on cost control, improving supply chain flow and efforts to re-engineer its production process by adding automation features and a centralized control management system have enhanced its productivity and yield rate. The company’s efforts to reduce carbon emissions are also commendable. XYIGF shares have dipped 1.3% year to date.
The Zacks Consensus Estimate for Hong Kong-based Kwun Tong’s fiscal 2024 earnings has remained unchanged in the past 30 days. The estimate indicates year-over-year growth of 12.5%. XYIGF currently has a Zacks Rank of 3 (Hold).
Price: XYIGF
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2 Stocks to Watch in the Prospering Glass Products Industry
The Zacks Glass Products industry is poised to benefit from the rising demand for glass, both as a packaging option and for use in construction. This is backed by its endless recyclability and sustainability benefits. Growing demand for energy-efficient, smart windows or smart glass panels will be another catalyst for the industry going forward.
Companies like Apogee Enterprises (APOG - Free Report) and Xinyi Glass (XYIGF - Free Report) are expected to gain from efforts to capitalize on this demand by boosting capacity and introducing innovative products to the market.
About the Industry
The Zacks Glass Products industry comprises companies that manufacture and sell glass products. One company produces glass containers for packaging beverages, food and pharmaceuticals. Another player in the industry offers coated and high-performance glass used in customized window and wall systems. The same company caters to the construction industry, ranging from commercial and multi-family residential to institutional buildings. It also provides coated glass for picture framing, wall décor and display applications. One company offers smart glass windows using artificial intelligence to adjust and suitably increase access to natural light while minimizing heat and glare. Another company developed an electrokinetic technology that can be retrofitted on any glass, enabling buildings to cut energy consumption and save on heating and cooling costs.
Major Trends Shaping the Future of the Glass Products Industry
Glass Packaging Gaining Popularity: Glass is increasingly becoming the packaging choice for customers, given its endless recyclability without a loss in quality. More than 80% of recycled bottles are used in making new bottles. This also helps negate the need for raw materials. Every ton of recycled glass saves 1,400 pounds of sand, 430 pounds of soda ash and 400 pounds of limestone/dolomite. As consumers are becoming more aware of their environmental footprint, a sharp spike in demand is noticed for refillable bottles, which offer the most sustainable and economical rigid packaging option. Manufacturers are focusing on improving their products by reducing the weight of the bottles for more convenient handling. Also, premium cosmetic and beverage brands are opting for glass to differentiate their products through packaging and ensure quality maintenance. Per Statista, the global market value of glass containers and bottles is expected to reach $65 billion in 2024 and surge to $110 billion in 2034 at a Compound Annual Growth Rate (CAGR) of 5.3%.
Demand in the Construction Sector Holds Promise: In recent years, the use of glass gained popularity in construction as a sustainable alternative to traditional building materials, including wood and bricks, owing to its cost-effectiveness, lightweight, immense strength and environmentally friendly factor. Glass increases the influx of natural light in the building, reduces energy consumption, minimizes carbon emissions and enhances the aesthetic appeal of structures. Rising construction activities across the residential, commercial and industrial sectors are likely to fuel the glass products industry’s growth. Increasing investments in the renovation or modernization of the existing infrastructure will also drive the industry’s growth. Various governments are introducing favorable policies and granting incentives to promote green construction to minimize greenhouse emissions and energy consumption, which bodes well for the industry. The global construction glass market is expected to be $112 billion in 2024 and register a CAGR of 5.2% to reach $144.3 billion by 2029.
Technological Innovation is the Key: Some players revolutionized the industry by bringing smart glass panels or smart windows to the market. These innovative products are designed to enable people to lead healthier and more productive lives by increasing access to daylight and views while minimizing glare and heat from the sun and keeping occupants comfortable. These products also help cut down on energy consumption from lighting and HVAC, thus reducing carbon emissions. The Inflation Reduction Act of 2022, already signed into law, will be a game changer for the industry as it includes a 30-50% Investment Tax Credit for smart windows.
Pricing, Improving Efficiency to Offset Cost Inflation: The industry is witnessing rising costs for transportation, chemical and fuel, and supply-chain headwinds. Therefore, industry players are increasingly focusing on pricing actions and cost reduction and resorting to automation in manufacturing to boost productivity and efficiency.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Glass Products industry is a 5-stock group within the broader Industrial Products sector. The industry currently carries a Zacks Industry Rank #37, which places it in the top 15% of the 251 Zacks industries.
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bullish prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. In a month, the industry’s earnings estimate for the current year has gone up 2%.
Before we present a few Glass Products stocks for investors’ consideration, it is worth looking at the industry’s stock-market performance and its valuation picture.
Industry Versus S&P 500 & Sector
The Glass Products industry has underperformed the S&P 500 and the sector in the past year. The stocks in this industry have collectively declined 31.3% against the Industrial Products sector’s gain of 8.8%. The S&P 500 composite has risen 27.8% during the said time frame.
One-Year Price Performance
Industry's Current Valuation
Based on the trailing 12-month EV/EBITDA ratio, a commonly-used multiple for valuing Glass Products companies, we see that the industry is currently trading at 3.52X compared with the S&P 500’s 20.09X and the Industrial Products sector’s 16.14X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry traded as high as 9.42X and as low as 2.33X, the median being 5.96X.
2 Glass Products Stocks to Keep an Eye on
Apogee: The company recently reported first-quarter fiscal 2025 results, showcasing a solid 37% improvement in earnings. APOG’s efforts to improve efficiency, cost management efforts and productivity gains drove the significant expansion in margins in the quarter. Apogee raised its adjusted earnings per share guidance for the fiscal 2025 to a range of $4.65-$5.00 from the previous guidance of $4.35-$4.75. The midpoint of the new range indicates year-over-year growth of 1%. In January 2024, APOG announced strategic actions (referred to as Project Fortify) to streamline its business operations, improve cost structure, and better position the company for profitable growth. Based on these developments, APOG’s shares have gained 14.6% year to date. Project Fortify is expected to deliver annualized cost savings of $12-$14 million. Approximately 60% of these savings will be realized in the fiscal 2025 and the rest in the fiscal 2026. The company’s solid liquidity position, coupled with a strong free cash flow, also places it well for growth.
The Zacks Consensus Estimate for Apogee’s current year’s earnings moved north 7% in the past 30 days. The consensus mark indicates year-over-year growth of 1.9%. This Minneapolis, MN-based entity has a trailing four-quarter earnings surprise of 23.4%, on average. Apogee currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price: APOG
Xinyi Glass: The company is expected to benefit from the ongoing improvement in demand for architectural and automobile glass products in its overseas markets. It continues to boost its overseas sales portfolio and expand overseas businesses to consolidate its leadership and competitive advantages in the industry. The company continues to invest in research and to develop and launch a range of unique glass products with different colors, thicknesses, special coating materials, high value-added features and parts, accessories and specialties. Focus on cost control, improving supply chain flow and efforts to re-engineer its production process by adding automation features and a centralized control management system have enhanced its productivity and yield rate. The company’s efforts to reduce carbon emissions are also commendable. XYIGF shares have dipped 1.3% year to date.
The Zacks Consensus Estimate for Hong Kong-based Kwun Tong’s fiscal 2024 earnings has remained unchanged in the past 30 days. The estimate indicates year-over-year growth of 12.5%. XYIGF currently has a Zacks Rank of 3 (Hold).
Price: XYIGF