"Our positive industry view is balanced by our belief that synergy upside surprises are likely to be limited, and current valuation is stretched. We've been broadly constructive on the can industry since launching coverage 4 years ago, and remain so today," the firm wrote in an analyst note.
Volumes in the can sector are growing 2% to 3% per year globally. Material inflation has limited lag and the earnings stream is stable through the cycle, according to Barclays.
"While this is all positive from an industry perspective, we see a long road ahead for Ball to achieve its stated synergy target, and with the shares trading near all-time highs around EV/EBITDA and free cash flow," the firm noted.
Barclays sees limited upside surprises and expects synergies to be back-half weighed over Ball's three-year planning period.
The Broomfield, CO-based company is a supplier of metal packaging to the beverage, food, personal care and household products sectors.
Shares of Ball closed lower by 0.04% to $71.30 on Thursday.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strongest point has been its very decent return on equity which we feel should persist.
But the team also finds weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: BLL