Crown (NYSE:CCK) Q3 2020 Earnings Preview

in EARNINGS/INVESTING IDEAS by

Crown Holdings, Inc. (NYSE:CCK) is scheduled to report Q3 earnings results after markets close for trading on October 19, 2020.

The company is expected to report earnings of $1.58/share on revenue of $3.046 billion. The consensus earnings per share (EPS) of $1.58/share is based on a poll of 14 analysts and represents a growth in eps of 1.2% over the same quarter last year, when the company reported earnings of $1.56/share.

The revenue forecast of $3.046 billion based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −1.2%. Last year the company reported $3.084 billion in revenue for the quarter.

Expected to report EPS growth of 1.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,045.63 $3,084.00 −1.2%
EPS $1.58 $1.56 1.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 1 quarters, and met expectations 2 quarters.

What are your expectations from Crown Holdings, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.29 $1.33 3.5% Beat
Q1, 2020 $0.92 $1.13 23.2% Beat
Q4, 2019 $0.95 $1.04 9.2% Beat
Q3, 2019 $1.56 $1.56 0.2% Beat
Q2, 2019 $1.47 $1.46 −0.9% Missed
Q1, 2019 $1.05 $1.05 0.0% Missed
Q4, 2018 $1 $1 −0.1% Missed
Q3, 2018 $1.64 $1.71 4.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 3.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 20, 2020 $68.26 $70.69 3.6% Increase
April 20, 2020 $62.90 $59.48 −5.4% Decline
February 4, 2020 $74.63 $78.74 5.5% Increase
October 16, 2019 $62.86 $67.49 7.4% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.79, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.79 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Crown Holdings, Inc. is currently trading at $84.08/share, up 1.0% for the day. The company is trading at approximately 98.6% of its 52-week high of $84.34/share. The company’s stock price is up 18.9% since the last earnings report and up 2.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 67.88 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CCK Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 22.82 and a forward P/E multiple of 15.75.

Crown Holdings, Inc.’s current share price also implies a price-to-book (P/B) multiple of 6.08. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $84.08
P/E Ratio 22.8x
P/E Ratio (Fwd) 15.8x
PEG Ratio 4.1
Total Debt / Total Capital 42.3%
Levered Free Cash Flow $675 million
EV / EBITDA 12.5x

Finbox

Crown Holdings, Inc. is a large-cap stock with a market capitalization of $11.041 billion and a total enterprise value of $19.495 billion. The company operates in the Materials sector and the Containers & Packaging industry.

Crown Holdings, Inc. designs, manufactures, and sells packaging products and equipment for consumer goods and industrial products in the Americas, Europe, and the Asia Pacific. It offers products for consumer goods, including steel and aluminum cans for food, beverage, household, and other consumer products; glass bottles for beverage product; and metal vacuum closures and steel crowns through its sales organization to the soft drink, food, citrus, brewing, household products, personal care, and various other industries. The company also provides products for industrial products, such as steel and plastic strap consumables and equipment, paper-based protective packaging, and plastic film consumables and equipment to metals, food and beverage, construction, agricultural, corrugated, and general industries. In addition, it offers aerosol cans and ends; and promotional and specialty packaging containers with various lid and closure variations. Further, the company provides industrial film and other related products; transit protection products, such as airbags, edge protectors, and honeycombs; and equipment and tools, such as manual, semi-automatic, and automatic equipment and tools used in end of line manufacturing applications to apply consumables. Crown Holdings, Inc. was founded in 1892 and is headquartered in Yardley, Pennsylvania.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.