Last Update 05 Dec 25

Fair value Decreased 0.26%

BALL: Cost Discipline And ESG Progress Are Expected To Drive Share Upside

Analysts have trimmed their price target on Ball, cutting it by approximately $6 to $55. Modestly higher discount rate assumptions and slightly lower future valuation multiples temper their outlook despite largely unchanged growth and margin expectations.

Analyst Commentary

Analyst sentiment around Ball reflects a balanced view, with expectations for steady execution tempered by valuation concerns and a higher cost of capital. The revised price target to $55 indicates confidence in the company’s fundamentals, but with less room for upside than previously anticipated.

Bullish Takeaways

Bullish analysts still view Ball’s core growth and margin profile as intact, supporting a valuation that remains above current trading levels despite the reduced target.
The maintenance of a Neutral stance rather than a downgrade suggests that execution risk is perceived as manageable, with no material deterioration in the underlying business.
Stable long term growth assumptions reflect confidence in Ball’s ability to benefit from resilient packaging demand and ongoing efficiency initiatives.
The new $55 target implies potential upside from current levels, signaling that analysts see a fair reward for disciplined execution and capital allocation.

Bearish Takeaways

Bearish analysts point to the lower target as evidence that valuation multiples may struggle to re rate higher without a clear acceleration in growth or margins.
The adoption of a modestly higher discount rate highlights increased sensitivity to macro risk and interest rates, pressuring Ball’s discounted cash flow valuation.
Neutral ratings underscore concerns that near term catalysts are limited, with the risk that execution missteps could quickly erode the remaining upside.
Any disappointment on volume recovery or cost savings could justify further compression in target multiples, which could limit the stock’s potential to re rate.

What's in the News

Ball reaffirmed its 2025 guidance, reiterating expectations for 12% to 15% growth in comparable diluted earnings per share, signaling confidence in its near term earnings trajectory (company guidance).
The board appointed Ronald J. Lewis as Chief Executive Officer effective November 10, 2025, following his leadership roles in Ball’s global supply chain and beverage packaging operations. He replaces Daniel W. Fisher, whose departure was characterized as a termination without cause (executive announcement).
Daniel Rabbitt was named permanent Chief Financial Officer on November 10, 2025, after serving as interim CFO since May 2025 and playing a key role in strategic transactions and corporate planning (executive announcement).
Ball, Alcoa and Unilever unveiled the first consumer packaging using ELYSIS carbon free aluminum smelting technology, producing low carbon aerosol cans that combine 50% ELYSIS primary aluminum with 50% post consumer recycled content, highlighting Ball’s sustainability push ahead of COP30 (strategic alliance announcement).
Ball completed a major tranche of its 2025 share repurchase program, buying back roughly 16.3 million shares, or about 5.79% of shares outstanding, for $865.51 million through September 30, 2025 (buyback update).

Valuation Changes

The fair value estimate has inched down from $60.31 to $60.15 per share, reflecting a very small downward adjustment in intrinsic value.
The discount rate has risen slightly from 7.58% to about 7.59%, indicating a marginally higher assumed cost of capital.
Revenue growth remains effectively unchanged at approximately 4.48% annually, signaling stable top line expectations.
The net profit margin is essentially flat at around 7.80%, with only a microscopic upward revision to margin assumptions.
The future P/E multiple has edged down from 15.10x to about 15.07x, implying a slightly lower valuation multiple applied to forward earnings.

Expanding demand for sustainable aluminum packaging and ready-to-drink beverages is fueling robust growth and enhanced market positioning across key geographies.
Operational focus on core packaging, supply discipline, and strong customer contracts is boosting efficiency, revenue stability, and long-term earnings visibility.
Heavy dependence on key customers, rising input costs, shifting product mix, operational challenges, and sustainability pressures threaten margins, revenue stability, and long-term market share.

Catalysts

About Ball

Supplies aluminum packaging products for the beverage, personal care, and household products industries in the United States, Brazil, and internationally.What are the underlying business or industry changes driving this perspective?

Accelerating demand for recyclable aluminum packaging, especially in Europe and emerging markets, is driving robust volume growth above historical averages as sustainability and anti-plastic trends gain traction globally; this is expected to sustain revenue growth and potentially improve operating leverage.
The shift in consumer behavior toward ready-to-drink beverages and energy drinks is supporting ongoing volume expansion, particularly across North America and EMEA, positioning Ball to grow at or ahead of market rates, favorably impacting top-line revenue and capacity utilization rates.
Tight industry supply and new capacity investments (e.g., new Northwest facility, asset acquisition in Florida) are aligning Ball to capture incremental share in high-growth regions while enhancing geographic footprint, underpinning long-term revenue growth and improved fixed-cost absorption.
Post-divestiture focus on core aluminum packaging and disciplined cost control initiatives are driving operational efficiency and capital allocation improvements, supporting higher net margins and accelerating comparable diluted EPS growth targets (12%-15%) in the near-to-medium term.
Increasing contract coverage (over 90% of 2026 volumes under contract in North America) paired with long-standing customer relationships provides revenue and earnings visibility, mitigating downside risks and enabling further stability in free cash flow and earnings trajectory.

Ball Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Ball's revenue will grow by 4.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.7% today to 7.7% in 3 years time.
Analysts expect earnings to reach $1.1 billion (and earnings per share of $4.29) by about September 2028, up from $581.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.9x on those 2028 earnings, down from 23.6x today. This future PE is lower than the current PE for the US Packaging industry at 22.2x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.36%, as per the Simply Wall St company report.

Ball Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Customer concentration risk remains significant, particularly in South America where Ball's performance is heavily dependent on a single large partner; if this customer underperforms or renegotiates contract terms, Ball could face margin and revenue pressure over the long term.
Persistent input cost volatility-including exposure to tariffs and aluminum prices-creates margin headwinds; if not effectively managed or hedged, these pressures could lead to sustained earnings volatility and decreased net margins.
The shift in product mix away from higher-margin beer cans toward lower-margin nonalcoholic and energy drink categories, while driving volume, may lead to ongoing margin compression and less profitability on incremental revenue.
Ongoing labor and operational inefficiencies in North America linked to capacity constraints, demand surges, and logistical challenges may elevate costs over time, potentially limiting Ball's ability to scale operating leverage and improve EBITDA margins.
Intensifying legislative and competitive pressures-including sustainability regulations, potential zero-waste mandates, and increased adoption of alternative packaging materials by major consumer brands-could structurally reduce long-term demand for traditional aluminum cans, limiting revenue growth and threatening market share.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $64.769 for Ball based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $84.0, and the most bearish reporting a price target of just $54.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $14.2 billion, earnings will come to $1.1 billion, and it would be trading on a PE ratio of 15.9x, assuming you use a discount rate of 7.4%.
Given the current share price of $50.41, the analyst price target of $64.77 is 22.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Ball?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Adjust Ball Price Target as Valuation Dips Amid Mixed Growth and Margin Outlook