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Silgan Holdings (SLGN)
NYSE:SLGN
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Silgan Holdings
(NYSE:SLGN)
64Neutral
Positive Factors
Acquisition Opportunities
The sale of Custom Containers would offer SLGN with more firepower to pursue more attractive acquisition opportunities.
Earnings Performance
SLGN delivered Q4 EPS results ahead of the Street, with EPS FY'25 outlook in line with consensus.
Growth Acceleration
A successful divestiture and subsequent redeployment in M&A should serve to accelerate growth in SLGN's more attractive dispensing systems / closures portfolio.
Negative Factors
Portfolio Optimization
Exiting Custom Containers is seen as a positive step towards further portfolio optimization.
Silgan Holdings (SLGN) vs. S&P 500 (SPY)
Market Cap
$5.09B
Dividend Yield1.62%
Average Volume (3M)935.35K
Price to Earnings (P/E)18.5
Beta (1Y)0.48
Revenue Growth-2.23%
EPS Growth-13.56%
CountryUS
Employees17,315
SectorConsumer Cyclical
Sector Strength62
IndustryPackaging & Containers
Share Statistics
EPS (TTM)2.58
Shares Outstanding106,794,650
10 Day Avg. Volume910,562
30 Day Avg. Volume935,354
Financial Highlights & Ratios
PEG Ratio3.17
Price to Book (P/B)N/A
Price to Sales (P/S)0.91
Price to Cash Flow (P/CF)1.40
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$63.50Price Target Upside29.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Silgan Holdings Business Overview & Revenue Model
Company DescriptionSilgan Holdings Inc. (SLGN) is a leading supplier of rigid packaging for consumer goods products. The company operates in several sectors including food and beverage, personal care, and household products. Its core products include metal containers, closures, and plastic containers, which are essential for the packaging of a wide range of consumer and industrial products.
How the Company Makes MoneySilgan Holdings generates revenue primarily through the manufacturing and sale of rigid packaging solutions. The company's key revenue streams include the production of metal containers, closures, and plastic containers. These products are sold to a diverse customer base, including large consumer goods companies that need reliable packaging solutions for their products. Significant partnerships with major consumer goods companies, long-term contracts, and a focus on innovation and sustainability in packaging contribute to Silgan's earnings. Additionally, the company's strategic acquisitions and expansions into new markets help in maintaining a steady growth in revenue.
Silgan Holdings Financial Statement Overview
Summary
Silgan Holdings demonstrates strong financial health with consistent revenue growth and effective cash flow management. While profitability margins are stable, high leverage could be a concern, impacting balance sheet strength and financial flexibility.Income Statement
Silgan Holdings shows consistent revenue growth from 2019 to 2023, with a notable increase from 2020 to 2021. The gross profit margin has remained stable around 15-16%, indicating consistent cost management. Although the net profit margin has slightly decreased from 2021 to 2023, it is still robust at 5.44% in 2023. The EBIT and EBITDA margins reflect strong operational efficiency with stable figures over the years.78
Positive
Balance Sheet
The company's debt-to-equity ratio remains high, showing significant leverage with a ratio above 2 over the years, which could pose financial risks. However, the return on equity (ROE) has been strong, reaching 17.25% in 2023, indicating efficient use of equity. Equity ratio remains low due to high leverage, which could impact financial flexibility.65
Positive
Cash Flow
Silgan Holdings presents strong cash flow management with increasing operating cash flows and positive free cash flow throughout the years. The Free Cash Flow to Net Income ratio indicates a high conversion of net income into cash, enhancing liquidity and financial stability. The Free Cash Flow Growth Rate is positive, reflecting good cash generation capability.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.85B | 5.99B | 6.41B | 5.68B | 4.92B | Gross Profit |
| 1.01B | 992.56M | 1.05B | 918.40M | 867.40M | EBIT |
| 573.38M | 603.85M | 601.96M | 591.10M | 512.40M | EBITDA |
| 789.92M | 858.67M | 964.03M | 846.44M | 770.01M | Net Income Common Stockholders |
| 276.38M | 325.96M | 340.85M | 359.08M | 308.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 822.85M | 642.92M | 585.60M | 631.40M | 409.50M | Total Assets |
| 8.58B | 7.61B | 7.35B | 7.77B | 6.52B | Total Debt |
| 4.14B | 3.43B | 3.51B | 3.79B | 3.25B | Net Debt |
| 3.31B | 2.78B | 2.92B | 3.16B | 2.84B | Total Liabilities |
| 6.60B | 5.72B | 5.63B | 6.21B | 5.27B | Stockholders Equity |
| 1.99B | 1.89B | 1.72B | 1.56B | 1.25B |
| Cash Flow | Free Cash Flow | |||
| 459.09M | 255.79M | 532.60M | 324.50M | 378.30M | Operating Cash Flow |
| 721.87M | 482.60M | 748.40M | 556.80M | 602.50M | Investing Cash Flow |
| -1.18B | -223.81M | -215.60M | -976.00M | -1.16B | Financing Cash Flow |
| 662.52M | -211.39M | -569.60M | 648.60M | 759.90M |
Silgan Holdings Technical Analysis
Negative
48.94
Price Trends
51.59
Negative
52.57
Negative
50.88
Negative
Market Momentum
-0.40
Negative
50.56
Neutral
68.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLGN, the sentiment is Negative. The current price of 48.94 is below the 20-day moving average (MA) of 49.56, below the 50-day MA of 51.59, and below the 200-day MA of 50.88, indicating a bearish trend. The MACD of -0.40 indicates Negative momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 68.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLGN.
Silgan Holdings Risk Analysis
Silgan Holdings disclosed 26 risk factors in its most recent earnings report. Silgan Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Silgan Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $4.19B | 25.73 | 6.42% | 4.89% | -6.93% | -65.66% | |
65 Neutral | $7.31B | 11.24 | 22.72% | 1.69% | -6.59% | -7.81% | |
64 Neutral | $5.09B | 18.46 | 14.25% | 1.62% | -2.23% | -13.56% | |
64 Neutral | $3.93B | 14.62 | 45.91% | 3.17% | -1.75% | -21.15% | |
63 Neutral | $4.89B | 13.92 | 17.12% | 3.95% | -1.65% | 18.38% | |
59 Neutral | $11.38B | 10.18 | -0.84% | 4.04% | 1.25% | -16.04% | |
54 Neutral | $1.57B | ― | -69.06% | 15.21% | 2.00% | 46.00% |
* Consumer Cyclical Sector Average
Performance Comparison
SLGN
Silgan Holdings
48.94
2.18
4.66%
GPK
Graphic Packaging
24.68
-2.70
-9.86%
SEE
Sealed Air
25.94
-5.51
-17.52%
SON
Sonoco Products
43.37
-10.71
-19.80%
REYN
Reynolds Consumer Products
23.90
-3.44
-12.58%
AMBP
Ardagh Metal Packaging
2.72
-0.31
-10.23%
Silgan Holdings Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -7.31% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, successful acquisition integration, and growth in key segments like dispensing products and pet food. However, it also noted challenges in the Metal Containers segment and the impact of customer inventory reductions. Overall, the positives of strong growth and strategic acquisitions outweighed the challenges faced.Highlights
Strong Financial Performance in 2024
Silgan delivered mid-single-digit organic adjusted EPS growth and double-digit free cash flow growth. They also achieved record adjusted EBIT and EPS figures, with adjusted EPS increasing by 35% year-over-year.
Acquisition of Weener Packaging
Silgan successfully acquired Weener Packaging, adding a high-margin, strong organic growth business to their portfolio. The acquisition contributed approximately $100 million in sales and $11.1 million in adjusted EBIT for the quarter.
Dispensing and Specialty Closures Segment Success
The segment delivered three consecutive quarters of double-digit organic growth in dispensing products, with adjusted EBITDA margins expanding by 75 basis points.
Pet Food Market Growth
Silgan experienced high single-digit growth in the pet food market during the second half, with double-digit growth in the fourth quarter.
Custom Containers Segment Improvement
The Custom Containers segment saw mid-single-digit volume growth and over 200 basis points of adjusted EBIT margin improvement.
Lowlights
Challenges in Metal Containers Segment
The segment faced a less favorable mix due to a double-digit increase in smaller cans for pet food and lower volumes for larger cans in the fruit and vegetable markets, resulting in an 8% sales decline.
Impact of Customer Inventory Actions
A large customer reduced inventories, impacting Silgan's volumes in the fruit and vegetable market. Severe weather also affected the fruit and vegetable pack.
Higher Debt Levels Post-Acquisition
Silgan ended the year with a pro forma net debt to EBITDA ratio of 3.3 times after the Weener acquisition.
Company Guidance
During the Silgan Holdings Fourth Quarter 2024 Earnings Call, the management provided guidance for 2025, highlighting expected double-digit increases in both earnings and free cash flow. The company anticipates mid-single-digit organic growth in adjusted EPS and double-digit growth in free cash flow for 2024, despite challenges such as customer destocking. Key segment growth projections include a mid-single-digit increase in Dispensing and Specialty Closures driven by high single-digit growth in dispensing products, and similar growth in Metal Containers and Custom Containers volumes. Silgan also expects to benefit from the integration of Weener Packaging, contributing $50 million in adjusted EBIT with additional first-year synergies. The company plans to capitalize on its strategic initiatives and cost-saving programs, projecting an adjusted EPS range of $4 to $4.20 for 2025, a 13% increase at the midpoint compared to 2024. Additionally, Silgan eyes a free cash flow estimate of approximately $450 million for 2025, marking a 15% increase from the previous year.Silgan Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Silgan Holdings Appoints Philippe Chevrier as COO
Positive
Jan 27, 2025
On January 27, 2025, Silgan Holdings announced the election of Philippe Chevrier as Executive Vice President and Chief Operating Officer, effective February 3, 2025. Chevrier brings extensive experience from his previous roles at Hexcel Corporation and Honeywell International Inc. This new appointment aligns with Silgan’s strategic direction to enhance its operational leadership and further its success in the rigid packaging industry.
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.