Aptar Starts Year With Strong Q1 Growth; Margin Slightly Down From Mix Shift and Higher Costs

Narrow-moat Aptar had a good start to the year, with constant-currency sales growth of 13% driven by postpandemic rebounds in the food and beauty segments, though operating margin was about flat year over year. We have slightly reduced our gross margin expectations for the year ahead, offset by higher top-line growth in our model, and our fair value estimate is unchanged at $132 per share. We continue to see the shares as undervalued, trading at a 13% discount to our fair value estimate.