UBS raises Crown Holdings stock price target to $114

Tuesday, UBS maintained a Buy rating on Crown Holdings (NYSE:CCK) and increased the price target to $114 from $109. The adjustment came after the company reported a strong first quarter, with earnings before interest and taxes (EBIT) surpassing consensus estimates by 20%. Additionally, Crown Holdings’ second-quarter earnings per share (EPS) guidance also exceeded expectations by 2%. The packaging giant, currently valued at $11.1 billion, has demonstrated robust financial performance, with InvestingPro data showing an EBITDA of $1.9 billion in the last twelve months. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate.

The favorable results in the first quarter were hinted at by competitor Ardagh Metal Packaging (NYSE:PKG) (AMBP) last week, particularly with AMBP’s American profits significantly outperforming UBS and consensus projections by 22%. Despite these strong results, Crown Holdings only modestly raised its 2025 EPS forecast by 10 cents, which seemed conservative against the roughly 45 cents cumulative beats implied in the first half of the year. UBS suggests this conservative stance may be due to the company’s cautious approach and is awaiting further details from Crown Holdings regarding demand expectations. InvestingPro data reveals the company maintains a "GREAT" overall financial health score, with particularly strong profitability metrics. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which covers what really matters for Crown Holdings and 1,400+ other top stocks.

AMBP recently increased its can growth expectations for the year by approximately 100 basis points, which leads UBS to believe that Crown Holdings’ guidance for the second half of the year might also be understated. The unchanged free cash flow (FCF) guidance at approximately $800 million was also seen as conservative by UBS.

In the first quarter, Crown Holdings amplified its share buyback program to about $200 million, which represents nearly 2% of its market capitalization, up from $100 million per quarter in the second half of 2024. UBS views these actions positively and notes that with leverage expected to decrease to around 2.5 times net debt to EBITDA through 2025, Crown Holdings could have more opportunities to enhance shareholder returns. The company’s strong free cash flow yield of 7% supports these shareholder-friendly actions, and InvestingPro highlights management’s aggressive share buyback strategy as a key strength. For detailed analysis of Crown Holdings’ valuation and growth prospects, investors can access the full Pro Research Report on the InvestingPro platform.

In other recent news, Crown Holdings Inc. reported robust financial results for the first quarter of 2025, surpassing both revenue and earnings per share (EPS) projections. The company achieved an adjusted EPS of $1.67, significantly above the forecasted $1.23, and reported revenue of $2.89 billion, exceeding expectations by $70 million. Crown Holdings also raised its full-year EPS guidance to a range of $6.70 to $7.10, indicating confidence in continued strong performance. The company’s strategic initiatives, such as capacity optimization and cost reduction programs, contributed to a 3.7% year-over-year increase in net sales. In addition, the Americas Beverage segment income rose by 25%, highlighting Crown’s market strength. The company returned $233 million to shareholders during the first quarter, showcasing a commitment to shareholder value. Furthermore, global beverage can volumes increased by 1%, with North American food can volumes up 16%. Analysts from Bank of America and Jefferies expressed positive sentiments regarding the company’s performance and future prospects.

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