JPMorgan Upgrades Silgan Holdings (SLGN) to Neutral

JPMorgan analyst Jeffrey Zekauskas upgraded Silgan Holdings (NYSE: SLGN) from Underweight to Neutral with a price target of $53.00 (from $46.00).

The analyst comments: "Silgan's EBITDA growth potential should be higher for the 2025-2026 period. The company has negotiated the acquisition of Weener Packaging, which could add about $100m to 2025 EBITDA, and $115m in adjusted EBITDA to Silgan's total in 2025. Silgan is also facing cost penalties in F2024 of about ($0.10/sh) in the Metal can segment because of customer inventory reductions in 2024, which we believe are unlikely to repeat in 2025. Finally, Silgan's volumes in the Dispensing and Custom Container segments are beginning to turn positive after a period of weakness. Silgan expects that it can remove $20m in costs from Weener or about $0.15/share over a two year period, which we think may prove a conservative estimate. Silgan indicated on its conference call that its acquisition opportunities appear to be increasing. We would not be surprised if the company announced other deals beyond its $900m acquisition of Weener for 8.7x adjusted EBITDA and 7.2x inclusive of synergies."

For an analyst ratings summary and ratings history on Silgan Holdings click here. For more ratings news on Silgan Holdings click here.

Shares of Silgan Holdings closed at $51.43 yesterday.

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