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CCL Industries Inc Class B (TSE:CCL.B)
TSX:CCL.B

CCL Industries (CCL.B) AI Stock Analysis

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CCL Industries

(TSX:CCL.B)

Rating:78Outperform
Price Target:
C$89.00
▲(10.74%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)

CCL Industries Business Overview & Revenue Model

Company DescriptionCCL Industries Inc. engages in manufacture and sale of labels, and provides media and software solutions. It operates through four segments: CCL, Avery, Checkpoint, and Innovia. The CCL segment offers pressure sensitive and extruded film materials for decorative, instructional, security, and functional applications in the consumer packaging, healthcare, chemicals, consumer durables, electronic device, and automotive markets. This segment also provides extruded and labeled plastic tubes, aluminum aerosols and specialty bottles, folded instructional leaflets, precision decorated and die cut components, electronic displays, polymer banknote substrate, and other complementary products and services. The Avery segment offers printable media products, including address and shipping labels, marketing and product identification labels, indexes and dividers, business cards, and name badges supported by customized software solutions; and organizational products, such as binders, sheet protectors, and writing instruments. This segment also provides direct to consumer digitally imaged media products, such as labels, business cards, name badges, and family oriented identification labels supported by unique web-enabled e-commerce URLs. The Checkpoint segment offers technology-driven loss-prevention, inventory management, and labelling solutions, including radio frequency and radio-frequency identification solutions to retail and apparel industries. The Innovia segment provides specialty, high-performance, multi-layer, and surface engineered biaxially oriented polypropylene films for pressure sensitive label materials, flexible packaging, and consumer packaged goods industries. It operates in Canada, the United States, Puerto Rico, Latin America, Europe, Asia, Africa, and Australia. The company was founded in 1951 and is headquartered in Toronto, Canada.
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: 11.87%|
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
86
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
80
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
78
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.39B7.25B6.65B6.38B5.73B5.24B
Gross Profit2.19B2.14B1.91B1.72B1.59B1.50B
EBITDA1.63B1.58B1.25B1.26B1.19B1.09B
Net Income858.40M843.10M530.20M622.70M599.10M529.70M
Balance Sheet
Total Assets10.19B9.86B8.92B8.66B7.63B7.34B
Cash, Cash Equivalents and Short-Term Investments821.00M820.60M774.20M831.50M594.10M700.30M
Total Debt2.57B2.45B2.28B2.36B1.85B2.09B
Total Liabilities4.74B4.58B4.30B4.40B3.88B4.05B
Stockholders Equity5.46B5.28B4.62B4.27B3.75B3.28B
Cash Flow
Free Cash Flow648.10M601.90M541.70M545.60M514.90M600.10M
Operating Cash Flow1.05B1.06B1.00B992.80M838.70M882.90M
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
Positive
Last Price80.37
Price Trends
50DMA
76.77
Positive
100DMA
73.52
Positive
200DMA
74.96
Positive
Market Momentum
MACD
0.94
Negative
RSI
65.55
Neutral
STOCH
87.12
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CCL.B, the sentiment is Positive. The current price of 80.37 is above the 20-day moving average (MA) of 78.44, above the 50-day MA of 76.77, and above the 200-day MA of 74.96, indicating a bullish trend. The MACD of 0.94 indicates Negative momentum. The RSI at 65.55 is Neutral, neither overbought nor oversold. The STOCH value of 87.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
78
Outperform
$14.07B16.6316.78%1.59%9.80%60.44%
TSWPK
78
Outperform
C$2.77B13.7011.26%0.45%5.50%9.93%
TSIFX
77
Outperform
C$67.72M11.529.56%13.92%310.18%
74
Outperform
C$1.72B9.689.65%9.19%-2.58%100.21%
73
Outperform
C$1.73B9.689.65%32.61%-2.58%100.21%
62
Neutral
$16.85B11.50-7.38%2.96%1.59%-23.36%
$688.75M-0.24%5.06%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CCL.B
CCL Industries
80.37
10.60
15.19%
TSE:IFX
Imaflex
1.30
0.27
26.21%
TSE:TCL.A
Transcontinental
20.68
7.12
52.51%
TSE:TCL.B
Transcontinental Inc. Class B
20.67
7.14
52.77%
TSE:WPK
Winpak
44.75
3.27
7.88%
CADNF
Cascades
6.84
0.56
8.92%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: May 17, 2025