Ball’s Q2 Results Are Overshadowed by an Unexpected Drop in Demand; Shares Now Fairly Valued

Narrow-moat Ball Corp. reported second-quarter results that were largely in line with our expectations, but management raised concerns of an unexpected deceleration in beverage packing demand. Revenue increased roughly 20% year over year on higher selling prices and a slight rise in volume. Consolidated adjusted operating margin came in at 9.5% for the quarter, a 200-basis-point decrease from a year ago. Increased selling prices were not enough to offset higher operating costs during the quarter. We expect additional pricing action as inflationary pressures persist in the second half of the year.