Q: THEY SAY HOPE IS NOT STRATEGY, BUT WHAT IS THE HOPE AND ETC. FOR CCL.B?
5i Research Answer:
CCL.B is now trading at 14.6x times' Forward P/E. In the last few years, sales growth was quite consistent which was supported by organic growth as well as small acquisitions. The balance sheet is strong, with net debt of $1.5B and net debt/EBITDA is 1.2x. Based on consensus estimates, sales are expected to grow by 3% -5% organically going forward. Overall, CCL.B fundamentals are still going in the right direction. The share price was anemic in the last few years largely due to a multiple contraction that offset growth in fundamentals (multiples went from 22x to 14.6x), we think the current valuation is quite attractive, but we think investors need patience for the name.