AptarGroup Beats 4Q Estimates; Street Says Buy

AptarGroup Inc delivered better-than-expected numbers in the fourth quarter as the packaging technology provider saw an increase in demand for its products.

Shares of AptarGroup (ATR) fell 1.5% at the end of trade on Thursday. The company posted earnings per share (EPS) of $0.92 for the fourth quarter, ahead of analysts’ expectations of $0.90.

Revenue increased 12% year-on-year to $749.33 million, topping analysts’ estimates of $726.15 million. The increase in 4Q revenues was primarily attributable to double-digit growth in the pharma and food-beverage segments on the back of broad based product demand. The company also witnessed strong demand in the personal care and home care markets.

For fiscal 2020, the company generated sales of $2.93 billion, up from the $2.86 billion posted in 2019. Due to the negative impact of the COVID-19 pandemic on the beauty and beverage market, diluted earnings per share came in at $3.64 versus $4.01 in the comparable year-ago period.

AptarGroup President and CEO Stephen B. Tanda said, “We have greatly increased deployment of digital engagement formats. As the pandemic continues, we will adapt to changing market conditions and leverage the lessons learned as we become an even more agile organization.”

Looking ahead to 1Q, AptarGroup expects earnings per share to land between $0.86 to $0.94 based on an effective tax rate of 28% to 30%. (See Aptar Group stock analysis on TipRanks)

Last month, Deutsche Bank analyst Debbie Jones raised AptarGroup’s price target to $152 (7.8% upside potential) from $127 and reiterated a Buy rating. The analyst is most positive on Beverage cans group in the packaging sector, given “underlying global demand along with favorable contract structures that are still being played out.”

The rest of the Street has a Strong Buy consensus rating on the stock, based on 3 Buys and 1 Hold. The average analyst price target of $151.75 implies about 7.6% upside potential from current levels.

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