Silgan Q3 Earnings: Can NasdaqGS:SLGN Hit Its $0.93 EPS Target?

in EARNINGS/INVESTING IDEAS by

Silgan Holdings Inc. (NasdaqGS:SLGN) is scheduled to report Q3 earnings results before markets open for trading on October 21, 2020.

The company is expected to report earnings of $0.93/share on revenue of $1.478 billion. The consensus earnings per share (EPS) of $0.93/share is based on a poll of 11 analysts and represents a growth in eps of 22.4% over the same quarter last year, when the company reported earnings of $0.76/share.

The revenue forecast of $1.478 billion based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 11.9%. Last year the company reported $1.321 billion in revenue for the quarter.

Expected to report EPS growth of 22.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,478.23 $1,321.30 11.9%
EPS $0.93 $0.76 22.4%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.64 $0.85 32.7% Beat
Q1, 2020 $0.50 $0.57 15.1% Beat
Q4, 2019 $0.38 $0.38 0.4% Beat
Q3, 2019 $0.76 $0.76 0.6% Beat
Q2, 2019 $0.54 $0.55 2.8% Beat
Q1, 2019 $0.43 $0.46 6.6% Beat
Q4, 2018 $0.36 $0.38 6.2% Beat
Q3, 2018 $0.76 $0.76 0.0% 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 7.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $35.31 $37.99 7.6% Increase
April 22, 2020 $32.45 $33.70 3.9% Increase
January 28, 2020 $31.47 $30.93 −1.7% Decline
October 23, 2019 $31.04 $30.48 −1.8% Decline

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 −2.51, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.51 implies a 0.6% chance of earnings manipulation.

Fundamentals And Technical Analysis

Silgan Holdings Inc. is currently trading at $39.38/share, down −0.8% for the day. The company is trading at approximately 97.8% of its 52-week high of $40.44/share. The company’s stock price is up 3.7% since the last earnings report and down −0.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.50 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SLGN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 17.41 and a forward P/E multiple of 13.79.

Silgan Holdings Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.02. 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) $39.38
P/E Ratio 17.4x
P/E Ratio (Fwd) 13.8x
PEG Ratio 0.7
Total Debt / Total Capital 44.2%
Levered Free Cash Flow $351.4 million
EV / EBITDA 11.3x

Finbox

Silgan Holdings Inc. is a mid-cap stock with a market capitalization of $4.401 billion and a total enterprise value of $7.708 billion. The company operates in the Materials sector and the Containers & Packaging industry.

Silgan Holdings Inc., together with its subsidiaries, manufactures and sells rigid packaging for consumer goods products in North America, Europe, and internationally. It operates through three segments: Metal Containers, Closures, and Plastic Containers. The Metal Containers segment manufactures and sells steel and aluminum containers for food products, such as pet food, vegetables, soups, proteins, tomato based products, adult nutritional drinks, fruits, and other miscellaneous food products, as well as general line metal containers primarily for chemicals. The Closures segment offers a range of metal and plastic closures, and dispensing systems for use in food, beverage, health care, garden, personal care, home, and beauty products, as well as capping/sealing equipment and detection systems. The Plastic Containers segment manufactures and sells custom designed and stock plastic containers for use in personal care and health care; food and beverage; household and industrial chemical; pharmaceutical; pet food and care; agricultural; automotive; and marine chemical products. This segment also provides plastic thermoformed barrier and non-barrier bowls, and trays for food products, such as soups, other ready-to-eat meals, and pet food products, as well as thermoformed plastic tubs for food, household, and personal care products, including soft fabric wipes. The company markets its products primarily through direct sales force, as well as through a network of distributors and an online shopping catalog. Silgan Holdings Inc. was founded in 1987 and is headquartered in Stamford, Connecticut.

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.

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