• If you are wondering whether Silgan Holdings at around US$42.71 is offering good value today, you are not alone. The stock’s current price invites a closer look at what you are actually paying for.
• The share price is up 5.1% over the last 30 days, even though the 1 year return sits at a 22.6% decline and the 3 year return at an 18.8% decline. This may have investors reassessing both its growth potential and its risks.
• Silgan has recently been in focus around its position in packaging and containers, as investors weigh how demand for consumer and industrial packaging products fits with the company’s long term plans and capital allocation. This broader context helps frame why some investors might see recent price moves as a reset in expectations rather than a clear new trend.
• On our Simply Wall St checks, Silgan scores a 5 out of 6 valuation score. We will unpack this using different valuation methods next, before finishing with a more holistic way to think about what that score really means for you.

Approach 1: Silgan Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today’s value. It is essentially asking what a stream of future cash in your hand is worth in today’s dollars.

For Silgan Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $98.5 million. Analysts provide forecasts for the next few years, and Simply Wall St then extrapolates further, with free cash flow projected to reach $695.2 million in 2035 according to the modelled path.

Pulling all those projected cash flows together and discounting them back to today gives an estimated intrinsic value of $92.83 per share. Compared to a current share price of about $42.71, the model implies the stock is 54.0% undervalued on these assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Silgan Holdings is undervalued by 54.0%. Track this in your watchlist or portfolio, or discover 866 more undervalued stocks based on cash flows.

Approach 2: Silgan Holdings Price vs Earnings

For a profitable company like Silgan Holdings, the P/E ratio is a useful way to think about value because it links what you pay directly to the earnings the business is already generating. What investors are really judging is how those earnings might change over time and how reliable they feel the business is, which together influence what a “normal” or “fair” P/E should look like.

Silgan’s current P/E is 14.3x. This sits below both the Packaging industry average P/E of 15.5x and the broader peer group average of 21.2x, which suggests the market is currently paying less for each dollar of Silgan’s earnings than for many peers. Simply Wall St also calculates a proprietary “Fair Ratio” for the company of 18.1x, which is the P/E it would expect given factors like earnings growth profile, industry, profit margins, market cap and identified risks.

The Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for Silgan’s specific characteristics rather than assuming all packaging companies deserve the same multiple. Comparing this 18.1x Fair Ratio to the current 14.3x P/E points to Silgan trading below that modelled fair level.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Silgan Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about a company, linked directly to your own assumptions for its future revenue, earnings and margins, and the fair value that results from those assumptions.

On Simply Wall St’s Community page, used by millions of investors, a Narrative connects three pieces: what you think Silgan is doing as a business, how that story feeds into a financial forecast, and the fair value you get at the end. You can then quickly compare that to today’s share price to help decide whether the stock looks attractive or not for you.

Because Narratives on the platform update when new information such as news or earnings arrives, your fair value view does not stay static. It adjusts as the Silgan story changes, which can help you reassess whether to add, hold or reduce your exposure.

For example, one Silgan Narrative might see higher future margins and assign a fair value well above today’s US$42.71 price. Another might assume more modest growth and arrive at a fair value much closer to, or even below, the current price.

Do you think there's more to the story for Silgan Holdings? 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.