Stock Analysis

Is Now An Opportune Moment To Examine Crown Holdings, Inc. (NYSE:CCK)?

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NYSE:CCK
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Crown Holdings, Inc. (NYSE:CCK) saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Crown Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Crown Holdings

What's the opportunity in Crown Holdings?

According to my valuation model, Crown Holdings seems to be fairly priced at around 12% below my intrinsic value, which means if you buy Crown Holdings today, you’d be paying a fair price for it. And if you believe the company’s true value is $111.52, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Crown Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Crown Holdings look like?

earnings-and-revenue-growth
NYSE:CCK Earnings and Revenue Growth December 7th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Crown Holdings' earnings over the next few years are expected to increase by 27%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in CCK’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on CCK, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 3 warning signs for Crown Holdings (1 is potentially serious!) that we believe deserve your full attention.

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