Crown Holdings Inc.CCK

Morningstar Rating

Stock Research and Analysis

by Morningstar Equity Analysts

Aluminum and steel container manufacturer Crown Holdings' turnaround efforts are showing positive results, and the company is positioned for growth in emerging markets. Still, the firm's exposure to changes in aluminum prices, currency exchange rates, Read more

Bulls Say

Crown has proved resilient during the recession. In the second quarter the company improved its operating margins, decreased its interest expense, and reported 2% growth in global beverage can volumes.

Crown has a history of building facilities in developing countries. This expertise allows it to grow internally in a field where growth is generally nonexistent.

Crown has been generating strong free cash flow, even in the most difficult years of its turnaround. As operating performance improves, free cash-flow growth rates should be even stronger.

Developing markets such as Eastern Europe and Central America are switching to aluminum cans from glass bottles for beer and soda packaging. Cans are cheaper to transport and have longer shelf life than bottles. Read more

Bears Say

Crown's heavy debt load and non-investment-grade rating mean that a considerable amount of earnings are used to cover interest expenses.

Crown isn't as profitable as its direct competitors. In a consolidating industry, only the low-cost provider has a sustainable competitive advantage.

Although the company believes that it has adequate reserves to cover its asbestos liabilities, court decisions could continue to cost it millions of dollars. Read more

Strategy

In recent years, Crown has been working to turn around its financial picture. The company's current goals are to improve operating margins in mature markets and reduce its debt load to allow greater Read more

Management

President, CEO, and chairman John Conway has been at the head of Crown since 2001 and has worked for the company since his previous employer was acquired by Crown in 1991. Under his leadership, the company has successfully restructured its debt and Read more

Profile

Crown Holdings is a global manufacturer of aluminum and steel containers for beverages, food, aerosols, and beauty products. The company operates facilities in more than Read more

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