In this article, we will discuss: 10 Best Plastics and Rubber Stocks to Buy According to Analysts.
According to the U.S. Bureau of Labor Statistics, a crucial component of the manufacturing industry, the Plastics and Rubber Products Manufacturing subsector produces commodities by processing raw rubber and plastic materials. Rubber Product Manufacturing and Plastics Product Manufacturing are the two primary groups that make up the industry. Since rubber is increasingly being replaced by plastics, the subsector mostly concentrates on single-material goods. First-line supervisors, team assemblers, and machine operators are important jobs in this industry. As of December 2024, the subsector employed about 718,300 people, of whom 545,300 were production and nonsupervisory workers. All employees made an average of $29.68 per hour, with production workers making $25.03. In 2023, the median yearly salary for occupations was $36,140 for hand packers and $67,440 for first-line managers.
The dynamics of the industry are reflected in workplace safety and pricing patterns. As per the aforementioned report, the subsector recorded 16 fatalities and 2.9 recordable injury cases per 100 full-time employees in 2023. As the number of enterprises steadily increased to 14,536 in Q2 2024, productivity remained a priority. While import and export price indexes showed stability in December 2024, price trends as shown by the Producer Price Index (PPI) showed a minor decline (-0.1%). By striking a balance between labor demands, safety regulations, and pricing pressures, the industry’s performance and trends highlight its importance to the economy.
According to a report by MNI, there are 13,675 businesses in the rubber and plastics industry in the United States, and their yearly sales total $553 billion. In 2023, employment increased from 846,729 to 858,177, a 1.35% growth. Public ownership is 9%, compared to 5% in manufacturing, while minority and female ownership rates are 2% and 1%, respectively. Materials are imported at a rate of 19% compared to 11% for manufacturing as a whole, while exports reach 42% of distribution, which is higher than the manufacturing average of 29%. The Midwest has 35% of manufacturers, whereas the South has 31%. This is due to the region’s close proximity to major automotive hubs like Kentucky.
The market for rubber and plastic products has expanded significantly in recent years. According to The Business Research Company, it will increase at a compound annual growth rate (CAGR) of 7.5% by 2025. The historical period saw growth due to industrialization and manufacturing expansion, automotive industry expansion, consumer goods production, medical and healthcare sector growth, and packaging industry evolution. The market for rubber and plastic products is also projected to increase significantly during the next years. It will increase at a compound annual growth rate (CAGR) of 6.5%.
Interestingly, as per the latest report, R&D expenditure in the U.S. plastics and rubber manufacturing sector doubled the national average growth rate in 2024, rising 19.4% to $3.1 billion from $2.6 billion in 2023. After a five-year downturn in which R&D investment fell by 16.2%, this represents a recovery. Driven by improvements in polymer materials, production efficiency, and sustainable product development, this sector currently ranks twelfth in terms of R&D investment increase among all sectors in the U.S.
Jordan Fazio, senior director of R&D tax credit at Source Advisors, stated:
“Investment in R&D is no longer optional but a strategic necessity to stay ahead in the competitive landscape. We’ve seen through working with national and international firms in the plastics and rubber manufacturing sector the increased importance placed on being at the forefront of technology to improve existing services and identify new innovation routes”
Overall, the investors have witnessed financial gains as the global materials industry of the broader market has grown by 4.25% since the beginning of the year and by 6.18% in the past year.
With that said, here are the 10 Best Plastics and Rubber Stocks to Buy According to Analysts.
A close-up of a factory worker handling advanced plastics materials with specialized machinery.
Methodology:
We sifted through online rankings to form an initial list of 20 plastics and rubber stocks. From the resultant dataset, we chose 10 stocks with a projected upside potential of at least 15% based on analyst price targets as of January 13. The stocks are ranked according to their upside potential. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
10. Amcor plc (NYSE:AMCR)
Upside Potential as of January 13: 15.01%
One of the Best Plastics Stocks, Amcor plc (NYSE:AMCR), manufactures plastic packaging all around the world, mostly for the fast-moving consumer products industry. Approximately 90% of profits are related to the flexible packaging industry. This soft, disposable plastic is used for a range of food, drink, healthcare, and personal hygiene items. The rest of the earnings come from the Latin and North American rigids sector, which largely produce beverage bottling for the soft drink industry. Amcor has a market share in its established regions of North America, Latin America, Europe, and Asia-Pacific, and it operates in over 35 countries. North America accounts for around half of group sales, with Western Europe and emerging markets sharing the remaining portion equally. Less than 5% of group sales come from Australia and New Zealand.
Since its founding as Australian Paper Manufacturers in the 1860s, Amcor plc (NYSE:AMCR) has seen constant change. In 2000, it sold its paper goods business, and then it made a number of acquisitions that led to its $7 billion acquisition of Bemis in 2019 to become the world’s largest packaging company. Recently, the company acquired Berry Global for $8.43 billion in all shares, establishing a $24 billion market leader in consumer and healthcare packaging. Shares increased by 5% after the announcement.
Amcor plc (NYSE:AMCR) reported $3.35 billion in revenue for the first quarter of fiscal 2025, a 2.6% decrease from the same time the previous year. Overall, the company had a successful start to fiscal 2025 due to trends in client demand and growing volume growth. Both the Flexibles and Rigid Packaging categories contributed to the 5% increase in adjusted EPS. Sequential volume increases and a persistent focus on cost control and margin quality maintenance boosted the growth.
On November 1, Amcor plc (NYSE:AMCR) declared a 2% increase in its quarterly dividend, to $0.1275 per share. The firm extended its dividend growth streak to 41 years with this increase.
The firm’s strategy is centered on increasing market share, investing in capacity and capabilities, and making effective acquisitions and divestments.
Cliff Asness’ AQR Capital Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 4.34 million shares worth $49 million as of Q3.
9. Silgan Holdings Inc. (NYSE:SLGN)
Upside Potential as of January 13: 16.34%
One of the Best Plastics Stocks, Silgan Holdings Inc. (NYSE:SLGN) makes over half of all metal food containers in North America. Among its main clients are Del Monte, Nestle, and Campbell Soup. The firm’s other business segments include plastic dispensers and containers for personal and healthcare items, as well as a closures division that produces metal and plastic lids and caps.
Silgan Holdings Inc. (NYSE:SLGN) recorded net revenues of $1.75 billion during the third quarter of 2024, a 3% drop from the year before. Despite this, the company strengthened its operations in the third quarter of 2024 by acquiring Weener Packaging, which added about 4,000 team members and drove financial accretion, margin improvement, and organic growth. The company scored a record third-quarter adjusted EBIT, with double-digit growth in global dispensing products and a 5% volume gain in its custom container division, aided by recent contract awards. Additionally, the company extended its exclusive, long-term supply arrangement with its biggest client in the metal container market. The company’s 2025 EPS growth is expected to be double digits, with the goal of surpassing its previous adjusted EPS record of $4.01.
As part of a broader research note anticipating 2025 for the Packaging/Paper industry, Truist boosted the price objective for Silgan Holdings Inc. (NYSE:SLGN) to $69 from $63 and maintained a Buy recommendation on the stock. Although there has been a growing conversation among the top consumer packaged goods brands about promotional activity, this has not yet led to significant volume growth as they are still satisfied with their margins given price increases over the past few years, the analyst tells investors in a research note. The early part of the year will start where 2024 ended, with packaging volumes overall being somewhat challenged due to modest promotional activity. The company is also releasing preliminary calendar 2027 forecasts and shifting its valuation period, which is currently based on calendar 2026.
Chuck Royce’s Royce & Associates was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 494,058 shares worth $25.94 million as of Q3.
8. Exxon Mobil Corporation (NYSE:XOM)
Upside Potential as of January 13: 18.34%
Exxon Mobil Corporation (NYSE:XOM) is best known as an oil and gas firm, but it is also a large manufacturer of specialty polypropylene, a raw material used in plastics, placing it among the Best Plastics Stocks. Propylene is a chemical created during the oil refining process, making it a natural outgrowth of Exxon’s primary business. When more masks and medical supplies were needed in 2020 to support the COVID-19 pandemic response, the company dramatically increased its output of polypropylene. Although plastics provide some diversification from Exxon’s primary petroleum supplies, the company is nonetheless firmly rooted in the fossil fuel energy system.
Exxon Mobil Corporation (NYSE:XOM) is investing more than $200 million in Texas to enhance innovative recycling facilities, bringing annual capacity to 500 million pounds and aiming for 1 billion pounds by 2027. The method reduces waste and promotes a circular economy by turning difficult-to-recycle plastics into raw materials for high-performance products. Exxon Mobil meets the increasing demand in industries like pet food and food-safe packaging by providing advanced recycling services to clients in more than 15 countries.
Exxon Mobil Corporation (NYSE:XOM) recorded one of its strongest third-quarter results in a decade with earnings of $8.6 billion. On a constant margin basis, year-to-date 2024 earnings have doubled from 2019 levels due to cost reductions, including a 24% drop in turnaround costs for Energy Products. Following 42 years of yearly dividend growth, the business announced a 4% dividend increase in 2024. In comparison to the previous year, upstream production increased by 24% to 4.6 million oil-equivalent barrels per day. Furthermore, the firm advanced hydrogen production and secured the largest offshore CO2 storage site in the United States, showcasing its success in low-carbon solutions.
On January 13, 2024, Truist lifted the price target for Exxon Mobil Corporation (NYSE:XOM) to $119 from $117. Based on minimally lower commodity prices, minimally higher production, flat costs, minimal asset degradation, and minimal to moderate operational efficiencies, Truist projected sequentially higher estimated 2026 earnings and free cash flows. It also notes that it believes commodity prices, particularly those of oil and natural gas, will remain firmer this year than many investors currently anticipate.
According to the 18 analysts, the average 12-month price projection for Exxon Mobil Corporation (NYSE:XOM) stock is $86.66, showing an 18.34% increase from the company’s current price of $73.26. The range of estimates is between $64 and $102.
Paul Cantor, Joseph Weiss, And Will Wurm’s Beech Hill Partners was the only stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 7,227 shares worth $777,408 as of Q3.
7. LyondellBasell Industries NV (NYSE:LYB)
Upside Potential as of January 13: 26.11%
One of the Best Plastics Stocks, LyondellBasell Industries NV (NYSE:LYB), a multinational chemicals firm based in the Netherlands, is the largest licensor of technologies for producing polypropylene and polyethylene, two essential building blocks used in the production of plastic products. The petrochemical manufacturer has facilities in Asia, Europe, and the United States. North American operations account for well over half of LyondellBasell’s output.
LyondellBasell Industries NV (NYSE:LYB) is a cash-generating powerhouse that has a track record of paying dividends to stockholders. The business may become entangled in the cyclical demand for chemicals, which tends to decline during uncertain economic times. Nevertheless, this is a diverse company that should be able to expand in response to rising demand globally.
LyondellBasell Industries NV (NYSE:LYB) outperformed its top-quartile rivals in the industry with a total recordable incident rate of 0.13 in Q3 2024, displaying good safety performance. Strong growth was achieved by the Olefins and Polyolefins-Americas segment, which experienced a 13% sequential EBITDA improvement to $758 million, its highest quarter since Q2 2022 and a 50% year-over-year gain.
The MoReTec-1 facility in Wesseling, Germany, is projected to be operational by 2026 after construction has begun due to a €40 million grant from the EU Innovation Fund. Over the previous 12 months, the company recorded $670 million in cash from operations and a 77% EBITDA-to-cash conversion rate. Advanced Polymer Solutions’ EBITDA has increased by more than 20% so far this year, primarily due to the packaging sector’s strong demand.
The average 12-month price objective for LyondellBasell Industries NV (NYSE:LYB) shares, as estimated by the 13 analysts, is $94.97; the low and high estimates are $85 and $105, respectively. The current stock price of $75.31 is expected to rise by 26.11%, according to the average goal.
Cliff Asness’ AQR Capital Management was the largest stakeholder in the firm among the funds in Insider Monkey’s database. It owns 864,370 shares worth $82.89 million as of Q3.
6. AptarGroup Inc. (NYSE:ATR)
Upside Potential as of January 13: 26.71%
One of the Best Plastics Stocks, AptarGroup, Inc. (NYSE:ATR) is widely recognized for its fragrance, cosmetics, and personal care products, as well as its line of patent-protected specialty pumps, valves, and dispensing closures that are needed by the pharmaceutical, household, industrial, and food industries.
AptarGroup, Inc. (NYSE:ATR) is a global company, with around half of its revenue coming from Europe and 33% from North America. Since 2016, the business has expanded its reach and diversified its portfolio by around two dozen collaborations, investments, and acquisitions.
AptarGroup, Inc. (NYSE:ATR) recently reported impressive third-quarter earnings, with a net income of $100 million, up 19% YoY. The Pharma segment reported sales growth of 8% and core sales growth of 7% due to the ongoing demand for proprietary drug delivery systems, while the Aptar Closures segment witnessed a 3% increase in sales YoY. The segment-wise performance was strong. On the other hand, despite growth in the personal care and home care markets, the Aptar Beauty segment’s reported sales fell 7%.
In Q3 of 2024, AptarGroup, Inc. (NYSE:ATR) was listed as one of the 2024 World’s Best Companies by Time, won a contract for ActivShield sterilization technology from the US government, and launched many new products.
Baird boosted the price target on AptarGroup, Inc. (NYSE:ATR) to $185 from $170 and has an Outperform rating on the stock. The company claimed that AptarGroup is in a strong position to provide a high-quality DD earnings growth algorithm, driven by the expansion of the pharmaceutical industry, cost-out initiatives in the packaging industry that should raise operating leverage once volumes eventually stabilize, and the flexibility of capital allocation, including share buybacks.
The average price objective of $195.86 is set by the four analysts who have 12-month price projections for AptarGroup stock; the low and high estimates are $180 and $215, respectively. Compared to the current stock price of $154.61, the average goal forecasts a 26.71% growth.
5. Carlisle Companies Incorporated (NYSE:CSL)
Upside Potential as of January 13: 27.02%
Carlisle Companies Incorporated (NYSE:CSL) is a major participant in the manufacturing of plastic products, primarily in the building materials industry. The company’s focus is on developing construction solutions and products for energy-efficient structures.
The third quarter saw record earnings for Carlisle Companies Incorporated (NYSE:CSL), with adjusted EPS increasing 24% to $5.78 and adjusted EBITDA margin growing 60 basis points year over year to 27.6%. Revenue increased by 6% year over year overall. The CCM division generated $998 million in revenue, a 9% increase YoY, and had a remarkable adjusted EBITDA margin of 32.8%. The firm paid out $466 million to shareholders in Q3 through the repurchase of 1.1 million shares, increasing buybacks to $1.2 billion. The company also paid out $46 million in dividends, which included an 18% increase announced in August.
MTL and PlastiFab are two strategic acquisitions that complement its building envelope portfolio and are in line with Vision 2030. Having $1.5 billion in cash and a 0.5x net leverage ratio, the company is nevertheless financially sound.
Baird maintained its Outperform rating on Carlisle Companies Incorporated (NYSE:CSL) shares and increased the price objective from $500 to $506. The company stated that although they are tactically more cautious in the short term because timing-related price-cost could put pressure on margins over the next few quarters, and the story also shifts toward capital deployment, they still plan to purchase the shares in the long run due to their pure-play transition, capital allocation opportunities, and long-term EPS power.
There are 5 analysts who have collectively rated the stock as a “Strong Buy.” The average price objective indicates a possible gain of 27.02% from the current stock price of $389.40.
Brandon Haley’s Holocene Advisors was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 176,974 shares worth $79.59 million as of Q3.
4. Eastman Chemical Company (NYSE:EMN)
Upside Potential as of January 13: 27.57%
One of the Best Plastics Stocks, Eastman Chemical Company (NYSE:EMN) is establishing itself as a pioneer in the circular economy by emphasizing sustainability and utilizing cutting-edge recycling technologies such as Polyester Renewal Technology (PRT) and Carbon Renewal Technology (CRT), which transform waste plastic into superior products. These innovations help alleviate the global plastic waste challenge while propelling growth in areas including consumer durables, textiles, and packaging, even though only a small portion of the 360 million metric tons of plastic garbage each year is recycled. The firm is positioned for a sustainable and prosperous future because of strategic investments in new recycling facilities in Tennessee, Texas, and France, including the largest methanolysis plant in the world, located in Kingsport, Tennessee. These investments are anticipated to provide over $500 million in EBITDA by 2029.
Eastman Chemical Company (NYSE:EMN)’s product portfolio is diverse, with a strong emphasis on sustainability-driven markets. Its products, such as Tritan Renew and Naia Renew, are manufactured using molecularly recycled feedstocks and cater to high-growth industries like packaging, textiles, and consumer goods. The company’s strategic growth strategies, which include ambitions to produce significant EBITDA through new facilities like the Longview, Texas plant, which is estimated to generate at least $150 million in EBITDA at full capacity, highlight its commitment to sustainability.
Eastman Chemical Company (NYSE:EMN)’s financial situation is improving, as evidenced by rising EBIT margins and EBITDA growth predicted to reach a compound annual growth rate (CAGR) of 8.3% through 2029. The company’s dedication to providing investors with value is shown by its strong track record of shareholder returns, which includes a 15-year run of dividend hikes and 2.5% yearly share buybacks. Despite certain hurdles in recent years, Eastman’s diverse business strategy and strategic investments in sustainable technologies have positioned the company for long-term growth and prosperity.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 663,884 shares worth $74.32 million as of Q3.
3. Dow Inc. (NYSE:DOW)
Upside Potential as of January 13: 29.39%
One of the biggest manufacturers of chemicals worldwide and Best Plastics Stocks, Dow Inc. (NYSE:DOW) creates essential parts for a wide variety of consumer and industrial chemical and plastic goods. The company has been in business for over 125 years, and its product line has changed. As a result of the 2019 merger of DowDuPont and the ensuing splits, the firm is now a commodity chemicals firm.
Dow Inc. (NYSE:DOW) produces a variety of plastics, sealants, adhesives, and additives for use in industrial, automotive, personal care, packaging, and building end markets. This plastics company offers investors a place in a vast and varied materials sciences portfolio that produced net sales of $39 billion in 2020.
Dow Inc. (NYSE:DOW) reported $10.88 billion in revenue for the third quarter of 2024, a 1.4% increase YoY. Volume increased by 1% over the previous year, driven by gains in Performance Materials & Coatings. Higher integrated margins in the Packaging & Specialty Plastics division were the primary driver of the $142 million annual improvement in operating EBIT. The operating cash flow was $800 million, which was $858 million less than the previous year. Higher inventory levels required to sustain sales growth and labor-related supply chain interruptions were the primary causes of this reduction. Furthermore, its free cash flow decreased to $64 million from $1.06 billion in the same quarter the previous year.
There has been significant progress on the Fort Saskatchewan Path2Zero project, with around 40% of the cracker filings finished and considerable foundation work underway. Moreover, Dow Inc. (NYSE:DOW) completed the purchase of polyethylene recycler Circulus, adding 50,000 metric tons of capacity for recycled materials yearly, and negotiated a long-term contract with Linde for a clean hydrogen supply.
Dow Inc. (NYSE:DOW) remains a great choice for income-focused investors in spite of recent setbacks. It distributed $490 million in dividends to stockholders in the most recent quarter. Furthermore, since 1912, the business has never missed a dividend payment.
Richard S. Pzena’s Pzena Investment Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 18.95 million shares worth $1.03 billion as of Q3.
2. Westlake Corporation (NYSE:WLK)
Upside Potential as of January 13: 34.50%
One of the Best Plastics Stocks, Westlake Corporation (NYSE:WLK) is a multinational producer of goods and materials utilized in several industries, such as construction, automotive, healthcare, and packaging. It is among the biggest manufacturers of polyvinyl chloride (PVC) and low-density polyethylene (LDPE) pipes in North America. Furthermore, it is a significant provider of thermoplastic goods that are semi-finished and suitable for compression molding and extrusion.
Westlake Corporation (NYSE:WLK) reported $3.1 billion in net sales for the third quarter of 2024, a 3% decrease from the quarter before. Production interruptions at their ethylene joint venture and one of its chlorovinyl facilities, as well as a 4% decline in sales volume, were the primary causes of this decline. In spite of these obstacles, the average sales price rose by 1%, suggesting that pricing power is somewhat resilient.
The business saved $35 million in the recent quarter, bringing its total cost savings to $120 million so far this year. It is on track to reach its full-year goal of $125-$150 million. Westlake is promoting sustainability with inventions like PVCO and ABA pipe and greater attempts to get recyclable PVC resin. Westlake Corporation (NYSE:WLK) maintains its positive outlook on the housing market despite weather-related interruptions, strengthened by strong connections with homebuilders and housing scarcity measures.
Westlake Corporation (NYSE:WLK) has proven its dedication to sustainability by advancing innovation with products like PVCO and A-B-A multi-layer pipes made from recycled materials. The company improves its market position and development potential by increasing the source of recyclable PVC resin and developing innovative consumer and industrial products through Westlake Dimex.
William B. Gray’s Orbis Investment Management was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 1.77 million shares worth $266.11 million as of Q3.
1. The Goodyear Tire & Rubber Company (NASDAQ:GT)
Upside Potential as of January 13: 50.79%
Under the Goodyear trademark, The Goodyear Tire & Rubber Company (NASDAQ:GT) produces and markets a range of rubber tires. The company’s tires are utilized on automobiles, trucks, buses, airplanes, motorbikes, mining, farms, and industrial equipment. The company’s regional tire businesses are represented by three operating segments: Asia Pacific, Europe, the Middle East, and Africa (EMEA), and the Americas.
In Q3 2024, The Goodyear Tire & Rubber Company (NASDAQ:GT) generated $347 million in segment operating income (SOI) with a 7.2% SOI margin, representing four consecutive quarters of margin growth under the Goodyear Forward Plan. The company increased its savings forecast for 2024 to $450 million, with run-rate benefits of $1.5 billion anticipated by 2025.
The Goodyear Tire & Rubber Company (NASDAQ:GT) recorded its best retail performance in the United States in 15 years, due to a rising last-mile fleet customer base and a compelling value proposition. Its collaboration with Ferrari also highlights its high-end, tech-driven approach.
Sumitomo purchases the Dunlop brand rights in strategic areas from the company for $526 million. The deal is in line with The Goodyear Tire & Rubber Company’s (NASDAQ:GT) debt reduction and portfolio optimization plan.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 2.19 million shares worth $19.36 million as of Q3.
Overall, The Goodyear Tire & Rubber Company (NASDAQ:GT) ranks first on our list of the 10 Best Plastics and Rubber Stocks to Buy According to Analysts. While we acknowledge the potential for GT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. 10 Best Plastics and Rubber Stocks to Buy According to Analysts is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
