Investing in Berry Global: Embracing Plastics for Long-Term Growth

Berry Global Group, despite recording a 26% increase in third-quarter sales to $3.7 billion, saw its stock dip by 1.1% due to concerns over its plastic-focused business. However, this presents a buying opportunity for investors as the company is adapting its growth strategy, capital structure, and name, while also navigating the evolving plastic packaging industry. Berry's earnings growth and stable position in the market may outweigh the current negative perception of plastic products.

Berry Global Group (BERY), a leading supplier of sustainable packaging solutions, reported a 26% increase in third-quarter sales to $3.7 billion, outpacing the market's expectations [1]. However, despite this impressive growth, the company's stock experienced a 1.1% dip due to concerns over its plastic-focused business. This dip, however, may present a buying opportunity for investors.

Berry's earnings growth and stable position in the market are noteworthy. The company's net income for the third quarter increased by 10% on a comparable basis to $2.03 per share, beating analysts' estimates [1]. Berry's earnings growth is a testament to its ability to navigate the current environment and maintain strong relationships with its customers.

Moreover, Berry's financials are robust. The company reported operating income of $336 million and operating EBITDA of $550 million, up 2% on comparable basis [1]. The company's cash flow remains strong, with $750 million targeted for the fiscal year, and it has repurchased $637 million of shares year-to-date, reducing total shares outstanding by 8% [1].

Despite concerns over plastic products, Berry is adapting its growth strategy. The company is navigating the evolving plastic packaging industry by prudently investing in areas such as health and wellness, personal care, and food safety. This focus on sustainability positions Berry for long-term growth and provides a path to delivering consistent, volume, and earnings growth.

In conclusion, Berry Global Group's strong financial performance and focus on sustainability make it an attractive investment opportunity, despite concerns over its plastic-focused business. The company's earnings growth, stable position in the market, and strategic investments position it for long-term success.

References:

[1] Berry Global Group, Inc. (2022, August 3). Berry Global Group, Inc. Reports Third Fiscal Quarter 2022 Results. Business Wire. https://www.businesswire.com/news/home/20220803005751/en/Berry-Global-Group-Inc-Reports-Third-Fiscal-Quarter-2022-Results