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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
▲(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)

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
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.39B7.25B6.65B6.38B5.73B5.24B
Gross Profit
2.19B2.14B1.91B1.72B1.59B1.50B
EBIT
1.10B1.06B928.80M895.40M849.60M787.30M
EBITDA
1.63B1.58B1.25B1.26B1.19B1.09B
Net Income Common Stockholders
858.40M843.10M530.20M622.70M599.10M529.70M
Balance SheetCash, Cash Equivalents and Short-Term Investments
821.00M820.60M774.20M831.50M594.10M700.30M
Total Assets
10.19B9.86B8.92B8.66B7.63B7.34B
Total Debt
2.57B2.45B2.28B2.36B1.85B2.09B
Net Debt
1.75B1.63B1.52B1.53B1.26B1.39B
Total Liabilities
4.74B4.58B4.30B4.40B3.88B4.05B
Stockholders Equity
5.46B5.28B4.62B4.27B3.75B3.28B
Cash FlowFree Cash Flow
648.10M601.90M541.70M545.60M514.90M600.10M
Operating Cash Flow
1.05B1.06B1.00B992.80M838.70M882.90M
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
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
78
Outperform
$13.75B16.1716.78%1.50%9.80%60.44%
TSWPK
78
Outperform
C$2.79B13.7711.26%0.40%5.50%9.93%
77
Outperform
C$1.76B9.849.65%4.28%-2.58%100.21%
76
Outperform
C$1.76B9.889.65%4.26%-2.58%100.21%
TSIFX
75
Outperform
C$71.88M12.239.56%13.92%310.18%
62
Neutral
$6.88B11.322.90%3.87%2.70%-24.57%
TSCAS
59
Neutral
$919.14M-0.24%5.21%2.88%80.95%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.