In a report released yesterday, Gabrial Hajde from Wells Fargo reiterated a Buy rating on Silgan Holdings (SLGN – Research Report), with a price target of $63.00.
Gabrial Hajde has given his Buy rating due to a combination of factors that indicate a positive outlook for Silgan Holdings. The potential sale of the Custom Containers business for over $1 billion is seen as a strategic move that could provide the company with significant capital. This capital could be redirected towards acquisitions in the more lucrative dispensing systems and specialty closures segments, which aligns with the company’s strategy for portfolio optimization.
Furthermore, the Custom Containers business has shown positive volume growth, and its sale at an attractive multiple of approximately 8.5 times its 2024 EBITDA would be a favorable outcome. The divestiture is expected to enhance Silgan Holdings’ ability to accelerate growth in its more promising segments, thereby improving the company’s overall financial performance. These strategic initiatives are likely to strengthen Silgan Holdings’ market position and drive future profitability, justifying the Buy rating.
Hajde covers the Consumer Cyclical sector, focusing on stocks such as Ball, Crown Holdings, and Graphic Packaging. According to TipRanks, Hajde has an average return of 3.1% and a 54.68% success rate on recommended stocks.