Core Viewpoint - Berry Global reported quarterly earnings of $2.27 per share, exceeding the Zacks Consensus Estimate of $2.25 per share, but slightly down from $2.28 per share a year ago, indicating a 0.89% earnings surprise [1] - The company generated revenues of $3.17 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.56% and showing an increase from $3.09 billion year-over-year [2] Earnings Performance - Berry Global has surpassed consensus EPS estimates three times over the last four quarters [2] - The company had a previous quarter earnings expectation of $2.03 per share but reported $2.18, resulting in a surprise of 7.39% [1] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is $1.39 on revenues of $2.91 billion, and for the current fiscal year, it is $8.17 on revenues of $12.43 billion [8] Industry Context - The Containers - Paper and Packaging industry, to which Berry Global belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, which may impact stock performance [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [6]

Transaction Details - Berry shareholders will receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share held, resulting in Amcor and Berry shareholders owning approximately 63% and 37% of the combined company, respectively [1] - The transaction values Berry's common stock at $73.59 per share and has received unanimous approval from both Amcor and Berry boards of directors [1] Strategic Benefits - The combination creates a global leader in consumer packaging solutions with a broader flexible film and converted film offering, a scaled containers and closures business, and a unique global healthcare portfolio [2] - The combined company will have unprecedented innovation capabilities and scale, enabling accelerated growth, sustainability solutions, and portfolio transformation [2] - The merger strengthens positions in high-growth, high-value categories such as Healthcare, Protein, Pet Food, Liquids, Beauty & Personal Care, and Food Service [4] - The combined company will have a combined R&D investment of $180 million per annum, ~1,500 R&D professionals, 10 innovation centers worldwide, and 7,000+ patents, registered designs, and trademarks [4] - The merger optimizes the footprint with operations in 140+ countries through ~400 production facilities, providing local expertise and global capabilities [4] Financial Benefits - The combined company will have revenues of $24 billion and adjusted EBITDA of $4.3 billion, including run-rate synergies [5] - The transaction is expected to deliver $650 million in cost, growth, and financial synergies by the end of the third year, including $530 million in annual run-rate pre-tax cost synergies and $60 million in annual run-rate financial savings [5] - The combined company expects over 35% adjusted cash EPS accretion and a double-digit return on investment [5] - The transaction is expected to enhance long-term shareholder value creation with sustained higher expected earnings growth from 10-15% to 13-18% per annum [5] Leadership and Structure - Peter Konieczny will serve as CEO, Graeme Liebelt as Chairman, and Stephen Sterrett as Deputy Chairman of the combined company [7] - The combined entity will be named Amcor plc, maintaining its primary listing on the NYSE and secondary listing on the ASX, with the global head office remaining in Zurich, Switzerland [7] - Amcor's board of directors will expand to 11 directors, with 4 nominated by Berry [8] Industry Impact - The merger combines two highly complementary businesses, creating a global leader in consumer packaging solutions with enhanced innovation and sustainability capabilities [2][4] - The combined company will offer customers a wider range of sustainable solutions, driving circularity, increasing the use of alternative materials, and lowering the carbon footprint [4] - The merger strengthens the combined company's position in high-growth markets and enhances supply chain resilience with a balanced geographic presence across continents [4]

Core Viewpoint - Wall Street analysts anticipate a slight decline in Berry Global's quarterly earnings per share, with a projected EPS of $2.25, reflecting a year-over-year decrease of 1.3%, while revenues are expected to increase by 2.1% to $3.15 billion [1]. Earnings Projections - Over the past 30 days, the consensus EPS estimate has been revised downward by 0.6%, indicating a collective reassessment by analysts of their initial forecasts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue and Sales Estimates - Analysts forecast 'Net Sales- Health, Hygiene & Specialties' to reach $641.13 million, indicating a year-over-year increase of 1.8% [5]. - 'Net Sales- Engineered Materials' is expected to be $683.03 million, also reflecting a 1.8% increase from the prior year [5]. - 'Net Sales- Consumer Packaging- North America' is projected at $818.29 million, showing a 4.1% increase year-over-year [5]. - 'Net Sales- Consumer Packaging- International' is estimated to reach $995.96 million, indicating a slight decline of 0.4% from the previous year [6]. Operating EBITDA Estimates - 'Operating EBITDA- Health, Hygiene & Specialties' is expected to be $88.81 million, up from $84 million year-over-year [6]. - 'Operating EBITDA- Consumer Packaging- North America' is projected at $172.18 million, compared to $161 million in the same quarter last year [7]. - 'Operating EBITDA- Consumer Packaging- International' is estimated to be $184.88 million, slightly up from $184 million in the previous year [7]. - The consensus for 'Operating EBITDA- Engineered Materials' stands at $126.26 million, compared to $118 million a year ago [8]. Stock Performance - Over the past month, Berry Global's shares have decreased by 5.2%, contrasting with a 1.6% increase in the Zacks S&P 500 composite [8].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Berry Global despite higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Berry Global is expected to report quarterly earnings of $2.25 per share, reflecting a -1.3% change year-over-year, while revenues are projected at $3.15 billion, up 2.1% from the previous year [3]. - The consensus EPS estimate has been revised 0.57% lower in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP of +0.25% indicates analysts have become more optimistic about Berry Global's earnings prospects [10]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Historical Performance - In the last reported quarter, Berry Global exceeded the expected earnings of $2.03 per share, achieving $2.18, resulting in a surprise of +7.39% [11]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [12]. Investment Considerations - While an earnings beat can influence stock movement, other factors may also play a significant role in determining stock performance [13]. - Berry Global is viewed as a compelling candidate for an earnings beat, but investors should consider additional factors before making investment decisions [15].

Core Viewpoint - Berry Global is positioned to potentially continue its earnings-beat streak in the upcoming report, having surpassed earnings estimates in the last two quarters with an average surprise of 5.01% [1][2]. Earnings Performance - In the last reported quarter, Berry Global achieved earnings of $2.18 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, resulting in a surprise of 7.39% [1]. - For the previous quarter, the company was expected to report earnings of $1.90 per share but delivered $1.95 per share, yielding a surprise of 2.63% [1]. Earnings Estimates - Recent estimates for Berry Global have been trending upward, with a positive Earnings ESP of +0.25%, indicating increased analyst optimism regarding its near-term earnings potential [3]. - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a strong likelihood of another earnings beat [3]. Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced a positive surprise nearly 70% of the time, indicating a high probability of exceeding consensus estimates [2]. - The Earnings ESP metric is crucial for predicting earnings performance, as a negative value can diminish its predictive power, although it does not necessarily indicate an earnings miss [3][4].

Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Berry Global (BERY) and AptarGroup (ATR) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stoc ...

Core Insights - Berry Global Group (BERY) is currently rated as a 2 (Buy) by Zacks and has an A grade for Value, indicating strong potential for value investors [2] - The stock has a Forward P/E ratio of 8.44, significantly lower than the industry average of 14.94, suggesting it may be undervalued [2] - BERY's PEG ratio stands at 1.14, compared to the industry average of 2.43, further indicating its potential for growth relative to its valuation [2] - The P/S ratio for BERY is 0.65, which is lower than the industry average of 0.97, reinforcing the notion that the stock is undervalued [3] Company Metrics - BERY's Forward P/E has fluctuated between 6.80 and 8.88 over the past 52 weeks, with a median of 7.76 [2] - The PEG ratio for BERY has ranged from 0.68 to 1.27 in the past year, with a median of 0.85 [2] - The P/S ratio of 0.65 indicates that BERY's sales performance is strong relative to its stock price, making it an attractive option for value investors [3]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank, helping investors identify securities likely to outperform the market in the short term [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales, aiming to find stocks trading below their true value [4] Growth Score - The Growth Score assesses a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable growth potential [5] Momentum Score - The Momentum Score targets stocks with upward or downward price trends, utilizing recent price changes and earnings estimate shifts to identify optimal buying opportunities [5] VGM Score - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive indicator for investors who prefer a multifaceted approach to stock selection [6] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, helping investors build successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] Stock to Watch: Berry Global (BERY) - Berry Global Group, Inc. operates in the nonwoven specialty materials and consumer packaging sectors, with a geographical revenue breakdown of 54.4% from North America, 36% from Europe, and 9.6% from other regions [12] - BERY holds a 3 (Hold) Zacks Rank and a VGM Score of B, with a Value Style Score of A, supported by a forward P/E ratio of 8.38, indicating strong valuation metrics [13] - Recent upward revisions in earnings estimates for fiscal 2024 have increased the Zacks Consensus Estimate by $0.08 to $7.51 per share, with an average earnings surprise of 2.9% [13][14]

Have you evaluated the performance of Berry Global's (BERY) international operations during the quarter that concluded in June 2024? Considering the extensive worldwide presence of this packaging company, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth. The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. I ...

Financial Performance - Net sales for the quarter ended June 29, 2024, were $3.161 billion, a decrease of 2% compared to the prior quarter's $3.229 billion, primarily due to decreased selling prices [50]. - Operating income for the quarter increased by 13% to $303 million, driven by a favorable impact from volume increases and a decline in business integration expenses [51]. - The Consumer Packaging North America segment reported net sales of $831 million, a 4% increase from the prior quarter, attributed to 2% organic volume growth and improved product mix [56]. - The Health, Hygiene & Specialties segment experienced a 2% decline in net sales to $647 million, primarily due to decreased selling prices, although operating income increased by 55% to $34 million [58]. - The Flexibles segment's net sales decreased by 2% to $724 million, with operating income slightly declining by 1% to $87 million [59]. - Year-to-date net sales were $9.090 billion, a 5% decrease from the prior year, primarily due to lower selling prices and a 1% volume decline [63]. - The Consumer Packaging International segment's year-to-date net sales declined by 6% to $2.844 billion, impacted by decreased selling prices and divestitures [65]. - The Health, Hygiene & Specialties segment's year-to-date net sales decreased by 5% to $1.896 billion, with operating income down 28% to $64 million due to price cost spread impacts [71]. - Net sales for the year-to-date (YTD) decreased to $2,069 million, a decline of 7% compared to $2,214 million in the prior YTD, primarily due to a $118 million decrease in selling prices and a 2% volume decline [72]. - Operating income increased slightly to $248 million, up 1% from $246 million, driven by a $13 million favorable impact from price cost spread, partially offset by a $9 million increase in depreciation and amortization [72]. - Comprehensive income declined by $337 million from the prior YTD, mainly due to a $218 million unfavorable change in currency translation and a $64 million unfavorable change in the fair value of derivative instruments [73]. Cash Flow and Liquidity - For fiscal 2024, the company projects cash flow from operations of $1.4 billion and free cash flow of $800 million, assuming $600 million of capital spending [48]. - Net cash from operating activities decreased by $193 million from the prior YTD, primarily due to higher working capital needs [75]. - Free cash flow for the YTD was $(176) million, compared to $(70) million in the prior YTD, indicating a decline in cash generation capabilities [77]. - The company had a cash balance of $509 million as of June 29, 2024, primarily located outside the U.S., and plans to refinance long-term debt obligations prior to maturity [78]. - The company repurchased approximately 2.0 million shares for $117 million in the YTD, with $324 million remaining available for share repurchases [77]. - The company’s senior secured credit facilities include $2.0 billion in term loans and a $1.0 billion revolving credit facility, with no borrowings outstanding as of the period end [84]. Foreign Exchange and Compliance - A 10% decline in foreign currency exchange rates would have resulted in a $9 million unfavorable impact on net income for the three quarterly periods ended June 29, 2024 [85]. - The company was in compliance with all covenants related to its $1,000 million asset-based revolving line of credit as of the end of the quarter [74]. Supply Chain Management - The company continues to manage supply chain disruptions and raw material price changes through close collaboration with suppliers and customers [47].