INVESTMENT TIP – 13/11/25
BUY AMCOR (AMC)
Amcor is a global leader in responsible packaging solutions, headquartered in Zurich, Switzerland, with operations in over 40 countries. Founded in Australia more than 160 years ago, Amcor designs and manufactures flexible and rigid packaging for food, beverage, healthcare, and personal care products. What makes Amcor unique is its focus on innovation and sustainability - it was one of the first packaging companies to commit to making all its products recyclable or reusable by 2025. Its global scale, advanced materials expertise, and partnerships with major consumer brands give it a strong competitive edge in developing lighter, safer, and more environmentally friendly packaging solutions.
Amcor’s 2024 acquisition of Berry Global is a transformative transaction, combining Berry’s leadership in rigid and specialty packaging, particularly in the consumer and healthcare sectors, with Amcor’s established strength in flexible packaging. The acquisition enhances Amcor’s earnings quality by reducing cyclicality and increasing exposure to defensive end markets such as home care, personal care, and pharmaceuticals. This improved sector mix should support more stable cash flows and margin resilience through economic cycles. From a valuation perspective, the stock appears mispriced, with current levels reflecting an overly cautious view of macroeconomic and integration risks. In our view, this underestimates the structural growth opportunities, synergy potential, and uplift in business quality that the combined entity offers.
Currently trading on a one-year forward price/earnings ratio of 10-11 (below its historical average of 13-15) and offering a 6% dividend yield, Amcor presents an attractive entry point at the current price. With the stock trading around five-year lows at $13.00 (see chart below) and a consensus 12-month price target of $16.16 (Bloomberg), we believe Amcor represents an excellent buying opportunity in a high-quality company with a defensive earnings profile and improving outlook.
Source: IRESS
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