Ball M&A Should Drive Earnings Growth Through 2011

Ball Corporation BLL is viewed attractively by Jefferies & Company, as it reports strong FCF generation and a disciplined approach to allocating capital and strong earnings. Supply for Ball remains tight as plants in China and Brazil run out consistently and strong demands are seen from specialty cans, particularly Alumi-Tek bottles (notably with Coors Light and Miller Lite), Jefferies reports. Ball looks to the future concerning M&A, as markets in Brazil, China, and Eastern Europe are all emerging and the company is looking to buyout its partner with the plant in China and increasing its stake in Brazil by 10%, according to Jefferies, which also notes that Ball acquired Neuman to scure its aluminum slug supply, allowing Ball to expand into the aluminum aerosol market. Jefferies maintains its Buy rating and $71 price target. Ball Corporation closed yesterday at $59.67.