Packaging industry could post better-than-expected Q1 results due to quarter-to-date "decent scanner data", a potential uptick in demand before the tariffs take effect, particularly in industrial-exposed packaging, and a weaker dollar, Morgan Stanley said Monday in a research note.

However, the firm lowered its full-year 2025 earnings estimates and price targets for most of the stocks under coverage to incorporate the risks of tariffs and softer demand due to increased inflation expectations.

The firm does not expect the companies to lower their full year outlook right away as the impact of tariffs on inflation and demand is yet to be seen. The bank expects the investors to look for any clarity provided by the companies regarding demand visibility for the remaining part of 2025.

The bank lowered its price targets on Ball Corp (BALL) to $60.00 from $70.00 and Crown Holdings (CCK) to $103.00 from $105.00, while maintaining overweight rating for both the stocks.

The bank reduced price targets on Ardagh Metal Packaging (AMBP) to $3.00 from $3.20 and Sealed Air (SEE) to $30.00 from $38.00. Ratings on these two companies were maintained at equal-weight.

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