Activist investor Carl Icahn disclosed a more than 8% stake in beverage can maker Crown Holdings (NYSE:CCK). Icahn’s roughly $700 million stake makes him the second-largest shareholder of Crown, a WSJ report stated.
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Icahn, who is well known for his penchant for pushing strategic changes in the companies he invests in, has a couple of suggestions for Crown too. The billionaire proposes that Crown should spin off its non-core businesses, including the aerosol and food-packaging units. Also, Crown must shed the transit specialist company Signode, which it acquired in 2017. Having said that, Icahn believes Crown must undertake more stock buybacks and focus on the core beverage can-making business.
Interestingly, consistent with the news of Icahn’s disclosure, which came in after-market yesterday, a series of corporate insiders at Crown usurped its shares yesterday. As per the TipRanks Insider Trading Tool, ten Directors of Crown undertook Uninformative Buy trades of CCK stock on November 2. This may be a coincidence or a possibility that the directors were aware of Icahn’s purchase beforehand. The CCK stock is yet to show any price reactions to the news.
Last week, Crown released its Q3FY22 results, which fell short of expectations. CCK’s adjusted earnings of $1.46 per share came in 30 cents lower than the consensus. The company attributed the earnings miss to weak demand for its products, inflationary pressures, high energy prices in Europe, high-interest rates, and currency headwinds. The company also lowered its full-year Fiscal 2022 adjusted earnings guidance to fall between $6.60 and $6.70 per share, from the previous guide of between $8.00 and $8.20 per share.
Is Crown Holdings a Buy?
On TipRanks, CCK stock has a Moderate Buy consensus rating. This is based on 12 Buys and five Hold ratings. The average Crown Holdings stock prediction of $96.06 implies 43.9% upside potential to current levels. Meanwhile, the stock has lost 38.1% so far this year.
