Silgan raised to Buy as Citi calls post

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Silgan Holdings (NYSE:SLGN) gained a bull on Thursday as Citi indicated the stock's steep slide after earnings was underserved.

Shares of the Connecticut-based packaging solutions company plunged over 9% on Thursday after a disappointing Q1 sales result. Guidance for the second quarter was also short of consensus estimates, likely amplifying downward pressure on the stock.

While a slight drop may have been reasonable, Citi told clients that the 9.1% drop was a stark overreaction. As such, the team moved to Buy from Hold and assigned a $56 price target to the stock.

"We've struggled to find a good reason for the sell-off; investors may have expected a 1Q beat following SON's raise and positive CMI Food Can data," the team wrote. "While the 2Q outlook is below consensus, the delta is likely from the lag in passing along higher resin costs, not weakness in underlying demand."

Shares of Silgan Holdings (SLGN) rose 4.99% on light volume in premarket action on Thursday.

Seeking Alpha's Quant team shifted to Hold in December, citing valuation concerns.