Silgan Earnings: Volumes Benefit From Moderating Destocking but Some Headwinds Remain

No-moat-rated Silgan Holdings reported second-quarter results that were largely in line with expectations. Customer destocking, which has affected the business for much of the last year, appears to be in the past, as management noted customer orders have reverted to more normal patterns. This is a welcome change for Silgan, and it drove positive year-over-year volume growth in all three segments. Nonetheless, consolidated revenue fell 3% year over year due to declines in the metal containers business. Consolidated operating margin, however, improved 100 basis points to 18.5%. We've increased our fair value estimate to $43 from $41 per share due to higher near-term profitability in our forecast.