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Wondering if CCL Industries at around C$83.19 is offering good value today, or if most of the upside is already priced in? This article breaks that question down into practical pieces you can use.
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The stock has been choppy in the short term, with the share price declining 5.9% over the last week and roughly flat over the past month at a 0.1% gain. This comes even though the 1 year return sits at 7.8% and the 3 year and 5 year returns are 37.6% and 31.7% respectively.
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Recent coverage has focused on how CCL Industries fits into broader packaging trends, as investors reassess what they are willing to pay for companies in the sector. That context helps explain how the stock can deliver a 7.8% return over the last year while still seeing a 5.9% pullback in just the last week.
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On Simply Wall St's valuation checklist, CCL Industries currently scores 3 out of 6. The next sections will compare what different valuation approaches say about the stock before finishing with a framework that can help you judge whether that score really lines up with your own view of value.
Approach 1: CCL Industries Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company's future cash flows and then discounting those back to today's value.
For CCL Industries, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow (FCF) is about CA$814.3 million. Analysts supply explicit forecasts out to 2027, with Simply Wall St extrapolating further. Within those projections, FCF is expected to be CA$775.5 million in 2026 and CA$846.9 million in 2027, with a ten year projection of CA$1,192.9 million in 2035 based on the stated growth assumptions.
Discounting those cash flows back to today, the DCF model arrives at an estimated intrinsic value of CA$156.02 per share. Compared with the recent share price around CA$83.19, this implies the stock is 46.7% below that DCF estimate, which points to CCL Industries trading at a substantial discount on this measure.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests CCL Industries is undervalued by 46.7%. Track this in your watchlist or portfolio , or discover 8 more high quality undervalued stocks .
Approach 2: CCL Industries Price vs Earnings
For profitable companies, the P/E ratio is a useful shorthand because it ties what you pay directly to what the business is currently earning. It effectively tells you how many years of current earnings the share price reflects.
What counts as a "normal" P/E depends on how investors view growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually means a lower one.
CCL Industries is trading on a P/E of about 17.8x, compared with a Packaging industry average of roughly 15.1x and a peer average of 13.0x. Simply Wall St's Fair Ratio for CCL Industries is 14.9x. This Fair Ratio is a proprietary estimate of what the P/E might look like after factoring in earnings growth characteristics, profit margins, the company's industry, market cap and its specific risks.
Because it adjusts for those company specific factors, the Fair Ratio can be more informative than a simple peer or industry comparison. Against this Fair Ratio of 14.9x, the current P/E of 17.8x suggests the stock is trading somewhat above that inferred level.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your CCL Industries Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives are introduced here as a simple way for you to describe your story for CCL Industries, link it to assumptions about future revenue, earnings and margins, and then see what that implies for fair value compared with today's price.
On Simply Wall St's Community page, Narratives let you set your own forecast and fair value, then instantly compare that Fair Value to the current Price to help frame when you might want to buy, hold or sell. The numbers update automatically when new information, such as earnings reports or news, is reflected in the data.
Narratives are already used by millions of investors on the platform. For CCL Industries, you might see one investor building a Narrative that produces a relatively high fair value because they expect stronger margins, while another sets a much lower fair value based on more modest revenue growth assumptions.
Do you think there's more to the story for CCL Industries? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CCL-B.TO .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
