Silgan (NYSE:SLGN) Shares Gap Down on Disappointing Earnings

Key Points

• Silgan Holdings Inc. experienced a significant drop in stock price, opening at $50.64 after closing at $55.80 due to weaker-than-expected earnings.
• The company reported an EPS of $1.01, which fell short of the consensus estimate of $1.03, but its revenue of $1.54 billion slightly exceeded expectations.
• A quarterly dividend of $0.20 per share was declared, providing an annualized yield of 1.73%, with a payout ratio of 29.74%.

Silgan Holdings Inc. (NYSE:SLGN - Get Free Report)'s share price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $55.80, but opened at $50.64. Silgan shares last traded at $47.05, with a volume of 850,436 shares trading hands.

The industrial products company reported $1.01 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.03 by ($0.02). Silgan had a net margin of 4.90% and a return on equity of 19.98%. The company had revenue of $1.54 billion during the quarter, compared to analyst estimates of $1.53 billion. During the same quarter in the prior year, the company earned $0.88 EPS. The business's revenue was up 11.4% on a year-over-year basis.

Silgan Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Monday, June 16th. Investors of record on Monday, June 2nd were issued a $0.20 dividend. This represents a $0.80 dividend on an annualized basis and a dividend yield of 1.8%. The ex-dividend date was Monday, June 2nd. Silgan's payout ratio is presently 29.74%.

Analyst Ratings Changes

A number of brokerages recently commented on SLGN. Truist Financial boosted their price objective on shares of Silgan from $62.00 to $67.00 and gave the company a "buy" rating in a research report on Friday, July 11th. Raymond James Financial decreased their price objective on shares of Silgan from $64.00 to $60.00 and set a "strong-buy" rating on the stock in a report on Thursday. Bank of America reissued a "neutral" rating and issued a $59.00 price objective (up previously from $57.00) on shares of Silgan in a research note on Wednesday, July 9th. Wells Fargo & Company boosted their price target on shares of Silgan from $60.00 to $62.00 and gave the company an "overweight" rating in a research note on Friday, July 18th. Finally, Citigroup boosted their price target on shares of Silgan from $60.00 to $63.00 and gave the stock a "buy" rating in a report on Thursday, May 8th. Two analysts have rated the stock with a hold rating, seven have assigned a buy rating and one has assigned a strong buy rating to the stock. According to MarketBeat.com, Silgan currently has a consensus rating of "Moderate Buy" and a consensus target price of $63.33.

Insider Activity at Silgan

In other Silgan news, VP B Frederik Prinzen sold 2,378 shares of the business's stock in a transaction on Tuesday, May 6th. The stock was sold at an average price of $54.05, for a total transaction of $128,530.90. Following the transaction, the vice president owned 1,380 shares of the company's stock, valued at approximately $74,589. The trade was a 63.28% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, EVP Robert B. Lewis sold 10,000 shares of the business's stock in a transaction on Monday, May 19th. The shares were sold at an average price of $55.92, for a total value of $559,200.00. Following the completion of the sale, the executive vice president owned 153,378 shares in the company, valued at $8,576,897.76. This represents a 6.12% decrease in their position. The disclosure for this sale can be found here. 1.13% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Silgan

Hedge funds have recently bought and sold shares of the company. Vaughan Nelson Investment Management L.P. acquired a new position in Silgan in the second quarter valued at $61,303,000. Millennium Management LLC increased its position in shares of Silgan by 764.7% during the 4th quarter. Millennium Management LLC now owns 1,012,644 shares of the industrial products company's stock valued at $52,708,000 after purchasing an additional 895,528 shares during the period. FMR LLC boosted its position in shares of Silgan by 12.2% in the fourth quarter. FMR LLC now owns 7,046,400 shares of the industrial products company's stock worth $366,765,000 after buying an additional 767,944 shares during the period. Norges Bank acquired a new stake in Silgan during the fourth quarter valued at $38,680,000. Finally, T. Rowe Price Investment Management Inc. raised its holdings in Silgan by 87.4% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 1,253,727 shares of the industrial products company's stock valued at $65,257,000 after buying an additional 584,840 shares in the last quarter. 70.25% of the stock is owned by hedge funds and other institutional investors.

Silgan Stock Down 2.1%

The stock has a market capitalization of $4.88 billion, a P/E ratio of 16.18, a price-to-earnings-growth ratio of 1.11 and a beta of 0.75. The company has a debt-to-equity ratio of 1.67, a current ratio of 0.48 and a quick ratio of 0.67. The firm has a 50 day moving average of $54.63 and a 200-day moving average of $53.00.

Silgan Company Profile

Silgan Holdings Inc, together with its subsidiaries, manufactures and sells rigid packaging solutions for consumer goods products in the United States and internationally. It operates through three segments: Dispensing and Specialty Closures, Metal Containers, and Custom Containers. The Dispensing and Specialty Closures segment offers a range of metal and plastic closures, and dispensing systems for food, beverage, health care, garden, home, personal care, beauty products, and hard surface cleaning products, as well as capping/sealing equipment and detection systems.