Citi Upgrades Silgan Holdings (SLGN) to Buy, 'We’ve struggled to find a good reason for the sell-off'
Citi analyst Anthony Pettinari upgraded Silgan Holdings (NASDAQ: SLGN) from Neutral to Buy with a price target of $56.00.
The analyst comments "We’re upgrading SLGN to Buy with a $56 target following 1Q earnings. SLGN shares sold off -9% despite in-line 1Q results and a reiterated FY view. We’ve struggled to find a good reason for the sell-off; investors may have expected a 1Q beat following SON’s raise and positive CMI Food Can data. While the 2Q outlook is below cons., the delta is likely from the lag in passing along higher resin costs, not weakness in underlying demand. Our target price conservatively uses a 9.0x NTM EBITDA multiple, in-line with the 5-year trading avg., despite SLGN’s improved growth outlook and shift into higher value Dispensing businesses. We expect SLGN can grow EBIT +MSD% Y/Y in ’23 & ’24 with a high quality portfolio that’s a good blend of growth and defense (Food Cans may actually lead Packaging in 1Q organic vol growth)."
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Shares of Silgan Holdings closed at $44.50 yesterday.