CCL Industries (CCL.B) AI Stock Analysis

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CCL Industries

(TSX:CCL.B)

Rating:78Outperform

Price Target:

C$89.00

▲(13.88%Upside)

CCL Industries presents a strong investment opportunity, driven by robust financial performance and positive earnings call highlights. The stock's technical indicators suggest upward momentum, though caution is advised due to near-term overbought signals. The valuation is balanced, with the P/E ratio and dividend yield indicating the stock is fairly priced. Overall, the company's operational excellence and strategic initiatives contribute to a favorable outlook, despite minor challenges such as increased corporate expenses and rising net debt.

Positive Factors

Business Model

CCL's resilient and diverse business model highlights its ability to manage through challenging market backdrops and seek out pockets of growth.

Competitive Position

CCL's competitive position as the world's largest label converter with a global network of plants and profitable expansion into materials science supports its outperform rating.

Financial Position

CCL remains well positioned and is one of the only players in the industry that has the financial wherewithal to take advantage of and benefit from many trends in the label industry.

Negative Factors

CCL Industries (CCL.B) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$13.75B

Dividend Yield1.5%

Average Volume (3M)317.56K

Price to Earnings (P/E)16.2

Beta (1Y)0.65

Revenue Growth9.80%

EPS Growth60.44%

CountryCA

Employees26,300

SectorConsumer Cyclical

Sector Strength62

IndustryPackaging & Containers

Share Statistics

EPS (TTM)1.18

Shares Outstanding163,814,540

10 Day Avg. Volume360,468

30 Day Avg. Volume317,565

Financial Highlights & Ratios

PEG Ratio7.58

Price to Book (P/B)2.52

Price to Sales (P/S)0.00

P/FCF Ratio20.97

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$90.28

Price Target Upside15.52% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

CCL Industries Business Overview & Revenue Model

Company DescriptionCCL Industries Inc. is a global leader in specialty label and packaging solutions, serving a wide range of industries including consumer products, healthcare, chemicals, and electronics. The company operates through four main business segments: CCL Label, CCL Container, Avery, and Checkpoint. CCL Industries is renowned for its innovative and sustainable label and packaging products that cater to the needs of multinational corporations, small businesses, and individual consumers worldwide.

How the Company Makes MoneyCCL Industries generates revenue primarily through the sale of specialty labels, containers, and packaging solutions. Its key revenue streams include the CCL Label segment, which offers pressure-sensitive labels, shrink sleeves, and other labeling products; the CCL Container segment, providing aluminum aerosol containers and specialty bottles; the Avery segment, which sells printable media and office products; and the Checkpoint segment, offering technology-driven labeling solutions such as RFID and electronic article surveillance. The company benefits from significant partnerships with major consumer goods companies and retailers, which help drive continuous demand for its products. Additionally, CCL Industries focuses on innovation and sustainability, which enhances its market competitiveness and contributes to its financial performance.

CCL Industries Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 8.33%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive picture, with significant sales growth, record earnings per share, and improved free cash flow. However, challenges such as increased corporate expenses, net debt rise, and uncertainties in the Avery segment due to tariffs and the back-to-school season were noted.

Q1-2025 Updates

Positive Updates

Sales Increase

Sales increased by 8.6% in Q1 2025, reaching $1.89 billion compared to $1.74 billion in Q1 2024.

Operating Income Growth

Operating income increased by 9%, reaching $316.9 million compared to $282 million in Q1 2024.

Record Earnings Per Share

Adjusted basic earnings per Class B share reached a record $1.18, up from $1.08 in Q1 2024.

Strong Free Cash Flow Improvement

Free cash flow from operations was an inflow of $39.1 million compared to an outflow of $7 million in Q1 2024.

Share Repurchase and Dividend Increase

The company repurchased 1.4 million shares for $100 million, and dividends increased by 10.3%.

Innovia Segment Performance

Innovia segment showed strong volume growth and share gain, especially in North America.

Negative Updates

Increased Corporate Expenses

Corporate expenses were up due to higher variable compensation expense and other general items.

Net Debt Increase

Net debt increased by $134 million to $1.75 billion as of March 31, 2025.

Checkpoint Segment Challenges

Declines in Checkpoint segment in regions like the Americas, offsetting strong performance in Europe.

Avery Segment Uncertainty

Uncertainty in the U.S. back-to-school season could impact Avery's performance.

Tariff Impact Concerns

Concerns about tariffs affecting the Avery segment, particularly regarding ring binder products.

Company Guidance

In the first quarter of 2025, CCL Industries reported an 8.6% increase in sales, reaching $1.89 billion compared to $1.74 billion in the same period in 2024. This growth was driven by 3.8% organic growth, 1.4% from acquisitions, and a positive 3.4% impact from foreign currency translation. Operating income rose to $316.9 million, marking a 9% increase from the previous year's $282 million, excluding currency translation effects. The company's net earnings improved by 6% to $207.4 million, and basic earnings per Class B share reached a record high of $1.18, up from $1.08. Free cash flow from operations was a positive $39.1 million, a significant turnaround from the $7 million outflow in Q1 2024. The company also repurchased 1.4 million shares for $100 million and increased its annual dividend by 10.3%, resulting in $156.3 million returned to shareholders. Net debt increased to $1.75 billion, with a leverage ratio of 1.14 times, demonstrating a strong balance sheet despite higher corporate expenses and finance costs.

CCL Industries Financial Statement Overview

Summary

CCL Industries showcases strong financial performance with robust revenue and profit growth, impressive profitability margins, and a solid balance sheet. The company's effective cash flow management supports its strategic growth initiatives. While leverage exists, it is mitigated by substantial equity backing, ensuring financial stability.

Income Statement

Very Positive

CCL Industries has demonstrated robust revenue growth with a notable increase from previous years, reaching $7.39 billion in the TTM period. The gross profit margin stands strong at 29.67%, and the net profit margin is impressive at 11.61%. EBIT and EBITDA margins are healthy at 14.83% and 22.10%, respectively, indicating efficient cost management and operational excellence. The company has shown consistent revenue growth, enhancing its profitability and market position.

Balance Sheet

Positive

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.47, reflecting a prudent approach to leverage. The equity ratio of 53.54% signifies strong equity backing and financial stability. Return on equity is commendable at 15.73%, showcasing effective utilization of shareholder funds. Despite the presence of substantial debt, the company's equity position provides a buffer against potential financial risks.

Cash Flow

Positive

CCL Industries exhibits a healthy cash flow with operating cash flow exceeding net income, indicating strong cash generation efficiency. The free cash flow growth rate is solid, and the free cash flow to net income ratio is 0.76, suggesting effective capital expenditure management. The company's ability to generate free cash flow consistently supports its strategic initiatives and growth plans.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
7.39B	7.25B	6.65B	6.38B	5.73B	5.24B
	Gross Profit
2.19B	2.14B	1.91B	1.72B	1.59B	1.50B
	EBIT
1.10B	1.06B	928.80M	895.40M	849.60M	787.30M
	EBITDA
1.63B	1.58B	1.25B	1.26B	1.19B	1.09B
	Net Income Common Stockholders
858.40M	843.10M	530.20M	622.70M	599.10M	529.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
821.00M	820.60M	774.20M	831.50M	594.10M	700.30M
	Total Assets
10.19B	9.86B	8.92B	8.66B	7.63B	7.34B
	Total Debt
2.57B	2.45B	2.28B	2.36B	1.85B	2.09B
	Net Debt
1.75B	1.63B	1.52B	1.53B	1.26B	1.39B
	Total Liabilities
4.74B	4.58B	4.30B	4.40B	3.88B	4.05B
	Stockholders Equity
5.46B	5.28B	4.62B	4.27B	3.75B	3.28B
Cash Flow		Free Cash Flow
648.10M	601.90M	541.70M	545.60M	514.90M	600.10M
	Operating Cash Flow
1.05B	1.06B	1.00B	992.80M	838.70M	882.90M
	Investing Cash Flow
-535.70M	-600.30M	-768.00M	-706.60M	-541.30M	-428.00M
	Financing Cash Flow
-463.20M	-424.30M	-295.20M	-72.60M	-370.00M	-461.30M

CCL Industries Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price78.15

Price Trends

50DMA

73.18

Positive

100DMA

72.53

Positive

200DMA

75.19

Positive

Market Momentum

MACD

1.51

Positive

RSI

58.35

Neutral

STOCH

21.21

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CCL.B, the sentiment is Neutral. The current price of 78.15 is below the 20-day moving average (MA) of 78.49, above the 50-day MA of 73.18, and above the 200-day MA of 75.19, indicating a neutral trend. The MACD of 1.51 indicates Positive momentum. The RSI at 58.35 is Neutral, neither overbought nor oversold. The STOCH value of 21.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CCL.B.

CCL Industries Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCL.B	78 Outperform	$13.75B	16.17	16.78%	1.50%	9.80%	60.44%
WPK	78 Outperform	C$2.79B	13.77	11.26%	0.40%	5.50%	9.93%
TCL.B	77 Outperform	C$1.76B	9.84	9.65%	4.28%	-2.58%	100.21%
TCL.A	76 Outperform	C$1.76B	9.88	9.65%	4.26%	-2.58%	100.21%
IFX	75 Outperform	C$71.88M	12.23	9.56%	―	13.92%	310.18%
Sector *	62 Neutral	$6.88B	11.32	2.90%	3.87%	2.70%	-24.57%
CAS	59 Neutral	$919.14M	―	-0.24%	5.21%	2.88%	80.95%

* Consumer Cyclical Sector Average

Performance Comparison

TSE:CCL.B

CCL Industries

77.90

7.15

10.11%

TSE:CAS

Cascades

9.21

0.25

2.78%

TSE:TCL.B

Transcontinental Inc. Class B

21.17

7.78

58.10%

TSE:TCL.A

Transcontinental

21.11

7.69

57.30%

TSE:IFX

Imaflex

1.38

0.33

31.43%

TSE:WPK

Winpak

44.63

2.35

5.56%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.