AptarGroup (ATR) AI Stock Analysis

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AptarGroup

(NYSE:ATR)

69Neutral

AptarGroup's overall stock score reflects solid financial performance and positive earnings call highlights, particularly in the pharma and closures segments. However, technical analysis indicates bearish momentum, and the stock's valuation may appear stretched due to a high P/E ratio. Challenges in the beauty segment and anticipated foreign currency and tax headwinds also weigh on the score.

Positive Factors

Earnings Growth

Improving ROIC should support multiple expansion, with a five-year EPS CAGR expected to be upwards of 10%, combined with a roughly 1% dividend as an attractive total shareholder return.

Financial Performance

Aptar's shifting portfolio mix to Pharma and improving margin profile following recent productivity actions in Beauty and Consumer is creating a faster-growth, higher margin company.

Market Position

Aptar is sure to benefit from the increasing spotlight on nasal drug delivery, being a global leader in nasal spray technology.

Negative Factors

Consumer Market Challenges

Maintaining a Neutral rating on ATR given FX and tax headwinds, remaining destocking, and the potential for continued China consumer weakness to weigh on Beauty segment results.

Foreign Exchange and Tax Impact

Unfavorable F/X translation is pegged as a $0.07 EPS headwind in Q1, and an estimated $0.28 headwind in 2025.

Inventory Issues

Destocking in nasal decongestants will hinder near-term sales.

AptarGroup (ATR) vs. S&P 500 (SPY)

Market Cap

$9.50B

Dividend Yield1.22%

Average Volume (3M)361.25K

Price to Earnings (P/E)26.0

Beta (1Y)0.58

Revenue Growth2.74%

EPS Growth30.22%

CountryUS

Employees13,500

SectorHealthcare

Sector Strength73

IndustryMedical - Instruments & Supplies

Share Statistics

EPS (TTM)5.53

Shares Outstanding65,966,140

10 Day Avg. Volume373,966

30 Day Avg. Volume361,245

Financial Highlights & Ratios

PEG Ratio0.86

Price to Book (P/B)N/A

Price to Sales (P/S)2.69

Price to Cash Flow (P/CF)13.50

P/FCF Ratio12.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$176.60

Price Target Upside21.79% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

AptarGroup Business Overview & Revenue Model

Company DescriptionAptarGroup, Inc. provides a range of dispensing, sealing, and material science solutions primarily for the beauty, personal care, home care, prescription drug, consumer health care, injectable, and food and beverage markets. The company operates through three segments: Pharma, Beauty + Home, and Food + Beverage. The Pharma segment provides pumps for nasal allergy treatments; and metered dose inhaler valves for respiratory ailments, such as asthma and chronic obstructive pulmonary diseases in pharmaceutical market; elastomer for injectable primary packaging components; and active material science solutions. The Beauty + Home segment primarily sells pumps, closures, aerosol valves, accessories, and sealing solutions to the personal care and home care markets; and pumps and decorative components to the beauty market. The Food + Beverage segment offers dispensing and non-dispensing closures, elastomeric flow control components, spray pumps, and aerosol valves to the food and beverage markets. It sells its products through own sales force, as well as independent representatives and distributors in Asia, Europe, Latin America, and North America. The company has a strategic partnership with PureCycle Technologies LLC to develop ultra-pure recycled polypropylene into dispensing applications; and a collaboration with Sonmol for developing a digital therapies and services platform targeting respiratory and other diseases. AptarGroup, Inc. was incorporated in 1992 and is headquartered in Crystal Lake, Illinois.

How the Company Makes MoneyAptarGroup makes money through the sale of its packaging solutions, which are primarily developed for the beauty, personal care, home care, pharmaceutical, food, and beverage industries. The company's revenue streams are largely derived from long-term supply agreements with major consumer goods companies, providing them with customized and proprietary dispensing and packaging systems. Aptar's business model focuses on innovation and customer-centric solutions, which allows for the establishment of strong, ongoing partnerships with global brands. Additionally, the company invests in research and development to continuously improve and expand its product offerings, thereby maintaining its competitive edge and securing new business opportunities. The company's earnings are also supported by its global manufacturing and distribution network, which enables efficient production and delivery of its products worldwide.

AptarGroup Financial Statement Overview

Summary

AptarGroup demonstrates a solid overall financial performance with consistent revenue and profit growth, efficient cost management, and strong cash flow generation. The company's balance sheet is stable with a manageable leverage level, although the decrease in total assets and equity warrants attention. AptarGroup appears well-positioned in the Medical Equipment & Supplies industry, but should continue to monitor potential risks related to asset and equity trends.

Income Statement

Very Positive

AptarGroup shows a robust financial performance with strong revenue growth of 2.73% from 2023 to 2024. The gross profit margin remains stable at 100%, indicating efficient cost management. The net profit margin improved from 8.16% in 2023 to 10.45% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins also show improvement, standing at 13.85% and 19.25% respectively for 2024. Overall, the company demonstrates strong growth and profitability trends.

Balance Sheet

Positive

The balance sheet reflects a stable financial position, with a moderate debt-to-equity ratio of 0.51, indicating manageable leverage. Return on equity (ROE) increased to 7.83% in 2024, showcasing effective utilization of shareholders' equity to generate profit. The equity ratio stands at 41.75%, pointing to a solid capital structure. However, the reduction in total assets and equity from 2023 to 2024 suggests potential risks that need monitoring.

Cash Flow

Positive

AptarGroup's cash flow performance is strong, with a notable free cash flow growth rate of 42.88% from 2023 to 2024, indicating efficient cash generation and reinvestment capability. The operating cash flow to net income ratio is 1.72, reflecting robust cash conversion efficiency. The free cash flow to net income ratio is 0.98, suggesting healthy cash flow relative to earnings. Overall, the company shows strong cash flow management and liquidity.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.58B	3.49B	3.32B	3.23B	2.93B
	Gross Profit
3.58B	1.26B	1.16B	1.16B	1.09B
	EBIT
496.50M	404.02M	379.27M	347.35M	339.50M
	EBITDA
777.45M	663.84M	609.41M	586.79M	556.17M
	Net Income Common Stockholders
374.54M	284.49M	239.29M	244.10M	214.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
226.18M	223.64M	141.73M	123.67M	300.38M
	Total Assets
4.43B	4.45B	4.20B	4.14B	3.99B
	Total Debt
1.08B	1.18B	1.18B	1.20B	1.17B
	Net Debt
852.22M	961.03M	1.03B	1.07B	872.73M
	Total Liabilities
1.95B	2.13B	2.14B	2.16B	2.14B
	Stockholders Equity
47.80M	2.31B	2.05B	1.97B	1.85B
Cash Flow		Free Cash Flow
366.93M	256.84M	163.00M	55.51M	318.11M
	Operating Cash Flow
643.41M	575.24M	478.62M	363.44M	570.15M
	Investing Cash Flow
-396.72M	-324.46M	-295.64M	-457.24M	-451.98M
	Financing Cash Flow
-225.34M	-171.55M	-162.10M	-81.52M	-73.72M

AptarGroup Technical Analysis

Technical Analysis Sentiment

Negative

Last Price145.00

Price Trends

50DMA

146.50

Negative

100DMA

154.21

Negative

200DMA

154.05

Negative

Market Momentum

MACD

-1.44

Negative

RSI

48.19

Neutral

STOCH

69.08

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATR, the sentiment is Negative. The current price of 145 is below the 20-day moving average (MA) of 145.03, below the 50-day MA of 146.50, and below the 200-day MA of 154.05, indicating a bearish trend. The MACD of -1.44 indicates Negative momentum. The RSI at 48.19 is Neutral, neither overbought nor oversold. The STOCH value of 69.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATR.

AptarGroup Risk Analysis

AptarGroup disclosed 29 risk factors in its most recent earnings report. AptarGroup reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

AptarGroup Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BDX	76 Outperform	$59.07B	34.17	6.92%	1.97%	5.89%	42.05%
HOLX	71 Outperform	$13.20B	18.31	15.78%	―	1.75%	50.25%
ATR	69 Neutral	$9.50B	26.04	15.68%	1.22%	2.74%	30.22%
STVN	69 Neutral	$6.10B	47.58	9.40%	0.25%	1.72%	-21.26%
WST	65 Neutral	$15.37B	31.81	17.71%	0.39%	-1.93%	-15.47%
RGEN	58 Neutral	$7.15B	―	-1.30%	―	0.33%	-171.08%
Sector *	50 Neutral	$5.51B	2.95	-43.70%	2.78%	16.94%	3.59%

* Healthcare Sector Average

Performance Comparison

ATR

AptarGroup

145.00

8.20

5.99%

BDX

Becton Dickinson

200.40

-27.82

-12.19%

HOLX

Hologic

56.50

-18.42

-24.59%

RGEN

Repligen

132.10

-28.88

-17.94%

WST

West Pharmaceutical Services

209.13

-167.30

-44.44%

STVN

Stevanato Group

22.08

-6.70

-23.28%

AptarGroup Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -7.32% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong performance in the pharma and closure segments, significant returns to shareholders, and sustainability achievements. However, these were offset by challenges in the beauty segment, foreign currency and tax headwinds, and a decrease in consumer health care sales.

Highlights

Pharma Segment Growth

The pharma segment achieved 8% core sales growth and an adjusted EBITDA margin of approximately 35%. Growth was driven by increased sales of higher value products and royalties.

Active Material Science Sales Increase

Active material science sales were up 13% for the full year 2024, due to increased demand for diabetes diagnostics, probiotics, and oral solid dose solutions.

Closure Segment Improvement

The closures segment returned to its core sales long-term target range, improving plant utilization by over 12% and achieving a 110 basis point improvement in adjusted EBITDA margins.

Record Return to Shareholders

Returned nearly $800 million to shareholders over five years through dividends and share repurchases, with 2025 expected to mark the 32nd consecutive year of increasing dividends.

Sustainability and Recognition

AptarGroup secured a place on the Climate A List and was named one of the World's Top Companies for Women by Forbes for the fourth consecutive year.

Lowlights

Challenges in Beauty Segment

Beauty segment core sales decreased 3% in the quarter, with lower tooling sales and a decline in high-value prestige products in EMEA.

Foreign Currency and Tax Headwinds

Anticipated significant foreign currency effects and a higher effective tax rate in the first quarter of 2025, resulting in a $55 headwind on EPS.

Consumer Health Care Decrease

Consumer health care core sales decreased 17%, driven by decreased demand for nasal decongestants and cough and cold medicines.

Company Guidance

During the AptarGroup, Inc. 2024 Fourth Quarter and Annual Results Conference Call, key financial metrics were highlighted, showcasing the company's performance and future outlook. AptarGroup reported a core sales growth of 2% in the fourth quarter, with adjusted earnings per share reaching $1.52, surpassing the top end of their guidance range. The adjusted EBITDA margin was 23% for the quarter. For the full year, the pharma segment achieved an 8% core sales growth with an adjusted EBITDA margin of approximately 35%. The closures segment saw a 7% core sales increase, with improved plant utilization and a 260 basis point improvement in adjusted EBITDA margin. The company returned $183 million to shareholders through dividends and share repurchases in 2024, marking a 20% increase from 2023. Looking ahead to 2025, AptarGroup anticipates continued growth, particularly in its pharma and closures segments, despite currency and tax headwinds. The company expects first-quarter adjusted earnings per share to be in the range of $1.11 to $1.19, with a noted foreign currency impact.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.