Silgan Holdings (SLGN): Evaluating Valuation After a Weak Year of Share Price Performance

Silgan Holdings (SLGN) has been drifting after a weak year for the stock, even as earnings and revenue continue to inch higher. That gap between share performance and fundamentals is what catches my eye here.

See our latest analysis for Silgan Holdings.

Over the past year, Silgan’s share price return has been weak, with a year to date decline of about 20 percent and a 1 year total shareholder return of roughly minus 20 percent. However, the recent 1 month share price return has turned mildly positive, suggesting sentiment may be stabilising rather than collapsing.

If you are reassessing packaging names after this sluggish patch for Silgan, it could be a good moment to compare it with other fast growing stocks with high insider ownership.

With earnings still growing and the shares trading at a sizeable discount to analyst targets and intrinsic value estimates, is this the moment to pick up Silgan on the cheap, or is the market already discounting future growth?

Most Popular Narrative Narrative: 17.7% Undervalued

With Silgan last closing at $40.85 against a narrative fair value near $49.64, the storyline leans toward upside if its growth plans play out.

Strong organic growth in high value dispensing products and successful integration of the Weener acquisition create incremental cross selling and innovation opportunities, especially in fast growing end markets like personal care, beauty, and home care, which is poised to support sustained above market revenue growth and higher margins.

Read the complete narrative.

Want to see what kind of revenue runway, margin lift, and earnings power this narrative is baking in over the next few years? The full storyline sets out a detailed growth path, a richer profit profile, and a future earnings multiple that together explain why fair value sits well above today’s price.

Result: Fair Value of $49.64 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering destocking, shifting consumer tastes away from canned goods, and elevated leverage could all delay the margin expansion story that investors are betting on.

Find out about the key risks to this Silgan Holdings narrative.

Build Your Own Silgan Holdings Narrative

If the narrative here does not quite fit your view, or you prefer to dive into the numbers yourself, you can build a custom storyline in just a few minutes using Do it your way.

A great starting point for your Silgan Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Ready for more investment ideas?

If you stop with Silgan, you could miss some of the most compelling opportunities on the platform, so take a moment to scan these targeted ideas.

• Capture early stage momentum by reviewing these 3633 penny stocks with strong financials that already back their promise with solid balance sheets and improving fundamentals.
• Strengthen your portfolio’s future focus by evaluating these 24 AI penny stocks that use artificial intelligence to pursue scalable, high margin growth.
• Seek dependable income by assessing these 12 dividend stocks with yields > 3% that combine robust cash generation with consistent payout yields.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com