Why Is Ball (BALL) Down 10.5% Since Last Earnings Report?

A month has gone by since the last earnings report for Ball (BALL). Shares have lost about 10.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Ball due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Ball Corporation before we dive into how investors and analysts have reacted as of late.Ball Corp.'s Q1 Earnings Beat Estimates, Margins Dip Y/YBall Corporation posted first-quarter 2026 comparable earnings of 94 cents per share, up 22.1% year over year and above the Zacks Consensus Estimate of 85 cents by 10.6%. Higher volumes in North and Central America and EMEA, and favorable price/mix across the beverage can footprint helped offset higher costs.On a reported basis, the company’s earnings per share (EPS) from continuing operations were 77 cents compared with the prior-year quarter’s 64 cents.Revenues rose 16.3% from the year-ago quarter to $3.60 billion, topping the consensus mark of $3.27 billion by 10.1%. Global aluminum packaging shipments inched up 0.8% year over year.Ball Corp Sees Margin Pressure From Higher CostsCost of sales (excluding depreciation and amortization) increased 18.6% to $2.96 billion. The gross profit totaled $646 million, up 7% from the year-ago quarter. The gross margin was 17.9%, a contraction from the prior-year quarter’s 19.5%.Selling, general and administrative expense was $150 million, a 0.7% increase year over year. Comparable segment operating earnings were $387 million, 10% higher than the prior-year quarter’s $352 million. Segment operating margin was 10.7% compared with 11.4% in the year-ago quarter.Ball Corp.'s Segment Performances in Q126The Beverage Packaging North and Central America segment’s revenues increased 21.4% year over year on higher volume and price/mix, mainly due to higher aluminum prices. Operating earnings amounted to $205 million, up 2.5% year over year. Higher volume and favorable price/mix helped offset the impact of higher costs.Sales in the Beverage Packaging EMEA segment were $1.11 billion, up 16% year over year. The upside was attributed to stronger shipments and currency translation, and contributions from the acquired Benepack business. Operating earnings were $134 million, marking 20.7% year-over-year growth.The Beverage Packaging South America segment’s revenues rose 7.5% year over year to $585 million, driven by higher prices, primarily attributable to higher aluminum prices, partially offset by lower volume. Operating earnings were $67 million, in line with the year-ago quarter. Higher price/mix was offset by higher costs and lower volume. Ball Corp.'s Cash Flow & Debt PositionThe company reported cash and cash equivalents of $730 million at the end of the first quarter of 2026, up from $449 million at the end of 2025. Operating cash flow was a usage of $777 million in the quarter compared with an outflow of $665 million in the year-ago quarter.  Free cash flow was negative $938 million. Adjusted free cash flow was negative $1.04 billion after $104 million of cash taxes tied to the Aerospace disposition. Ball Corp. also increased capital spending to $161 million from $81 million in the prior-year period. The company’s long-term debt increased to $7.02 billion as of the first quarter 2026-end, from $6.13 billion as of 2025-end. Net debt to comparable EBITDA was 3.39x.Maintains 2026 Targets and Shareholder ReturnsManagement reiterated expectations for 2026 comparable EPS growth of “10-plus per cent” and free cash flow greater than $900 million. BALL also said it remains on track to return at least $800 million to shareholders through buybacks and dividends by year-end, while continuing to invest in long-term, EVA-driven growth projects tied to sustainable aluminum packaging demand.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.VGM ScoresCurrently, Ball has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for value investors.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Ball has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks