Bank of America Readjusts its Strategy for Packaging Companies Such as Ball or Sonoco

Bank of America has revised its strategy on the U.S. packaging sector, adopting a more cyclical stance and downgrading its recommendation on companies such as Ball Corp and Silgan Holdings to “Neutral”. The decision is in response to these stocks approaching their target prices and an expectation of slowing profits through 2026.

According to the bank’s analysis, Ball could be affected by weak demand for alcoholic beverages and inventory reduction. In the case of Silgan, analysts believe that its investment thesis has already been fully assimilated by the market.

In contrast, it maintains a buy rating for Sonoco, as it presents an attractive valuation and could benefit from an eventual economic recovery.

For the sector as a whole, Bank of America projects a 6% increase in EBITDA in the second quarter, in the packaging sector in general. In the case of firms specializing in packaging, an 8% growth in earnings per share and a slight increase of 1% in volume is anticipated.

Through July 7, packaging stocks have accumulated a 4% drop in absolute terms and 10% against the market.