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Berry Global (BERY) Gains 15.8% in a Year: Will the Trend Last?
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Berry Global Group, Inc. (BERY - Free Report) appears in good shape, with its shares having rallied 15.8% in the past year against the industry’s 4.4% decrease.
What’s Aiding BERY?
BERY’s measures to expand operations through asset additions support its top-line growth. Berry Global acquired Pro-Western Plastics in June 2023. The acquisition boosted Berry Global’s container business in North America, particularly in the dairy, industrial, and medical sectors.
Berry Global’s cost reduction actions, including site rationalizations, moving business to more cost-efficient facilities and labor cost reductions, are expected to support its bottom line. In the first nine months of fiscal 2023, the company’s cost of goods sold declined 15.3% year over year. The company expects the cost reduction initiatives to provide annualized cost savings of $140 million in fiscal 2023 & fiscal 2024. $75 million of these savings are expected to be realized in fiscal 2023 while the majority of the balance is anticipated to be realized in fiscal 2024. Also, the company boasts a strong portfolio of products, the bulk of which includes consumer non-discretionary products.
The company’s commitment to rewarding its shareholders through dividends holds promise. In the first nine months of fiscal 2023 (ended June 2023), the company paid dividends worth $97 million and bought back shares worth $415 million. BERY intends to buy back shares worth at least $600 million in fiscal 2023 (ending September 2023).
Image Source: Zacks Investment Research
Will the Uptrend in Shares Last?
In the quarters ahead, strategic investments in high-growth end markets such as foodservice, health and beauty, dispensing and pharmaceuticals will be beneficial for the company. A reduction in raw material costs due to the deceleration in inflation and improving supply-chain conditions is expected to drive Berry Global's performance in fiscal 2023. The company’s focus on improving operational productivity and partnerships across the value chain is likely to continue improving margins and the financial performance in the quarters ahead.
Zacks Rank & Stocks to Consider
Berry Global currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 11.2% for 2023. The stock has gained 47% in the past year.
A. O. Smith Corp. (AOS - Free Report) presently carries a Zacks Rank #2 (Buy). AOS’ earnings surprise in the last four quarters was 10.5%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 2.9% for 2023. The stock has gained 23.1% in the past year.
Alamo Group Inc. (ALG - Free Report) presently carries a Zacks Rank of 2. ALG’s earnings surprise in the last four quarters was 13%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 1.1%. The stock has gained 29.5% in the past year.
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Berry Global (BERY) Gains 15.8% in a Year: Will the Trend Last?
Berry Global Group, Inc. (BERY - Free Report) appears in good shape, with its shares having rallied 15.8% in the past year against the industry’s 4.4% decrease.
What’s Aiding BERY?
BERY’s measures to expand operations through asset additions support its top-line growth. Berry Global acquired Pro-Western Plastics in June 2023. The acquisition boosted Berry Global’s container business in North America, particularly in the dairy, industrial, and medical sectors.
Berry Global’s cost reduction actions, including site rationalizations, moving business to more cost-efficient facilities and labor cost reductions, are expected to support its bottom line. In the first nine months of fiscal 2023, the company’s cost of goods sold declined 15.3% year over year. The company expects the cost reduction initiatives to provide annualized cost savings of $140 million in fiscal 2023 & fiscal 2024. $75 million of these savings are expected to be realized in fiscal 2023 while the majority of the balance is anticipated to be realized in fiscal 2024. Also, the company boasts a strong portfolio of products, the bulk of which includes consumer non-discretionary products.
The company’s commitment to rewarding its shareholders through dividends holds promise. In the first nine months of fiscal 2023 (ended June 2023), the company paid dividends worth $97 million and bought back shares worth $415 million. BERY intends to buy back shares worth at least $600 million in fiscal 2023 (ending September 2023).
Image Source: Zacks Investment Research
Will the Uptrend in Shares Last?
In the quarters ahead, strategic investments in high-growth end markets such as foodservice, health and beauty, dispensing and pharmaceuticals will be beneficial for the company. A reduction in raw material costs due to the deceleration in inflation and improving supply-chain conditions is expected to drive Berry Global's performance in fiscal 2023. The company’s focus on improving operational productivity and partnerships across the value chain is likely to continue improving margins and the financial performance in the quarters ahead.
Zacks Rank & Stocks to Consider
Berry Global currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Caterpillar Inc. (CAT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 11.2% for 2023. The stock has gained 47% in the past year.
A. O. Smith Corp. (AOS - Free Report) presently carries a Zacks Rank #2 (Buy). AOS’ earnings surprise in the last four quarters was 10.5%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 2.9% for 2023. The stock has gained 23.1% in the past year.
Alamo Group Inc. (ALG - Free Report) presently carries a Zacks Rank of 2. ALG’s earnings surprise in the last four quarters was 13%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 1.1%. The stock has gained 29.5% in the past year.