Morgan Stanley cuts Ball, sees better earnings revision upside at Crown

Investing.com -- Morgan Stanley downgraded Ball Corporation (NYSE: BALL) to Equal-weight from Overweight. Though the beverage can demand outlook remains solid into 2026 the stock offers less scope for positive earnings revisions than peers.

The downgrade is relative rather than fundamental.

“We continue to view BALL as a high quality asset within the packaging space given the company’s attractive EPS algorithm, shareholder return profile, and pure play exposure to the defensive beverage can space,” said Stefan Diaz, CFA.

But its 2026 earnings outlook is broadly in line with consensus, limiting the chance of upside surprises.

MS analysts cut its price target to $63 from $68, which is about 18% upside, and said a broader valuation re-rating is more likely in 2027 as new capacity ramps up and recently acquired assets are integrated.

Global beverage can demand growth of 2.3% in 2026, according to Morgan Stanley forecast, which continue to outpace underlying liquid consumption.

Growth is expected to be driven by further share gains for cans across regions, affordability pressures that keep consumption skewed toward at home drinking, and exposure to faster growing categories such as energy drinks, ready to drink cocktails and functional beverages.

Beverage can stocks have usually failed to re-rate toward historical valuation levels.

Morgan Stanley reiterated its Overweight rating on Crown Holdings Inc (NYSE: CCK) and kept it as its preferred way to play the beverage can growth theme.

Crown trades at a discount to its historical valuation, offers greater scope for earnings upgrades in 2026 and has an attractive shareholder return profile, with expected buybacks of more than 6% of its market value next year.

Crown has de-risked balance sheet with higher returns on invested capital relative to peers.

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