This Stock Is on Pace for Its Worst Quarter Since 1973

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Ball recently sold its beverage packaging business in Russia for $530 million.

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Ball Corporation

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Ball shares are on pace for their worst quarter since 1973, as the company grapples with weak customer demand and the sale of a business in Russia.

Best known for making aluminum packaging for drinks, such as cans and cups, Ball (ticker: Ball) has had a tough year, with its shares falling 50% in 2022.

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August was particularly tough, when the company reported second-quarter earnings well below Wall Street estimates and became the S&P 500.‘s
Worst performing stock that month.

“Our global beverage team is preparing for additional demand volatility, inflation and regional customer discrepancies given the global economic conditions,” Ball Chief Executive Daniel Fischer said in the company’s conference call in August.

Then on Wednesday, Ball announced that it sold its beverage packaging business in Russia to the Ernest Group for $530 million. In that deal, Ernest acquired Ball’s all-Russian-based business amid persistent geopolitical tensions.

Ball’s shares fell 0.8% to $47.93 on Tuesday, falling for six consecutive days. It was the longest losing streak for the stock since July 15. The stock was at a new 52-week low and its lowest level since January 2019.

It could also be the worst quarter for Ball since the 1970s.

Deutsche Bank analyst Kyle White maintained his hold rating but cut his 12-month price target on the ball from $64 to $54 and cut its earnings forecast for 2022 on Tuesday.

“The sale of the Russia business, a lower volume outlook and higher inflationary costs drive our 2022 earnings per share forecast of $3.40 to $3.22,” White wrote in his research note.

Truist Securities analyst Michael Roxland also has a hold rating on the stock, but recently lowered his price target from $61 to $55. Roxland wrote in a research note that while he views Ball as “a well-run company with a positive demand growth profile, the company is currently dealing with weak North American demand, inflation, supply chain and international demand growth.” The risk is facing headwinds.”

In addition, market demand remains flat, Roxland wrote, while the company is intent on reducing inventory, which it built up earlier in the year as it expected a more robust summer sales season in North America and will negatively affect profitability.”

Ball did not immediately respond to a request for comment.

Write to Angela Palumbo at [email protected]

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