Amcor (ASX:AMC) - Share price, News & Analysis

Q: What is the Fair Price of AMC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AMC (A$17.7) is trading below our estimate of [[fair value]] (A$25.34)

AMC fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	2/6
Financial Health	3/6
Dividends	3/6

AMC Stock Overview

Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions.

Rewards

Trading at 30.2% below our estimate of its fair value

Earnings are forecast to grow 2.07% per year

Earnings have grown 14.8% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Amcor Competitors

James Hardie Industries

ASX:JHX

AU$15.9b

Newcrest Mining

ASX:NCM

AU$17.0b

South32

ASX:S32

AU$18.7b

Lynas Rare Earths

ASX:LYC

AU$8.8b

Price History & Performance

Summary of all time highs, changes and price drops for Amcor
Historical stock prices
Current Share Price	US$17.70
52 Week High	US$18.98
52 Week Low	US$14.63
Beta	0.81
1 Month Change	-2.96%
3 Month Change	-3.44%
1 Year Change	7.73%
3 Year Change	23.00%
5 Year Change	9.39%
Change since IPO	154.68%

Recent News & Updates

Jul 09

Amcor (ASX:AMC) Has A Pretty Healthy Balance Sheet

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Jun 07

Is Amcor plc (ASX:AMC) Trading At A 44% Discount?

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Amcor plc ( ASX:AMC...

May 07

Amcor's (ASX:AMC) Shareholders Will Receive A Bigger Dividend Than Last Year

Amcor plc ( ASX:AMC ) has announced that it will be increasing its dividend on the 14th of June to AU$0.17. This makes...

Shareholder Returns

	AMC	AU Packaging	AU Market
7D	-1.0%	2.0%	1.1%
1Y	7.7%	-14.0%	-8.1%

Return vs Industry: AMC exceeded the Australian Packaging industry which returned -14% over the past year.

Return vs Market: AMC exceeded the Australian Market which returned -8.1% over the past year.

Price Volatility

Is AMC's price volatile compared to industry and market?
AMC volatility
AMC Average Weekly Movement	2.7%
Packaging Industry Average Movement	5.2%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	18.0%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: AMC is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: AMC's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2018	46,000	Ron Delia	https://www.amcor.com

Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The company operates through two segments, Flexibles and Rigid Packaging. The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.

Amcor Fundamentals Summary

How do Amcor's earnings and revenue compare to its market cap?
AMC fundamental statistics
Market Cap	US$18.69b
Earnings (TTM)	US$948.00m
Revenue (TTM)	US$14.09b

19.7x

P/E Ratio

1.3x

P/S Ratio

Is AMC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AMC income statement (TTM)
Revenue	US$14.09b
Cost of Revenue	US$11.32b
Gross Profit	US$2.77b
Other Expenses	US$1.82b
Earnings	US$948.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 17, 2022

Earnings per share (EPS)	0.64
Gross Margin	19.67%
Net Profit Margin	6.73%
Debt/Equity Ratio	159.3%

How did AMC perform over the long term?

See historical performance and comparison

Dividends

3.8%

Current Dividend Yield

77%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is AMC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AMC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AMC. This is calculated by dividing AMC's market cap by their current preferred multiple.
What is AMC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$18.69b

AMC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.8x
Enterprise Value/EBITDA	11.8x
PEG Ratio	9.5x

Price to Earnings Ratio vs Peers

How does AMC's PE Ratio compare to its peers?

AMC PE Ratio vs Peers

The above table shows the PE ratio for AMC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	20.8x
JHX James Hardie Industries	24.7x	11.4%	AU$15.9b
NCM Newcrest Mining	13.3x	-9.1%	AU$17.0b
S32 South32	13.1x	-13.8%	AU$18.7b
LYC Lynas Rare Earths	32.2x	13.8%	AU$8.8b
AMC Amcor	19.7x	2.1%	AU$18.7b

Price-To-Earnings vs Peers: AMC is good value based on its Price-To-Earnings Ratio (19.7x) compared to the peer average (20.8x).

Price to Earnings Ratio vs Industry

How does AMC's PE Ratio compare vs other companies in the Global Packaging Industry?

Price-To-Earnings vs Industry: AMC is expensive based on its Price-To-Earnings Ratio (19.7x) compared to the Global Packaging industry average (13.8x)

Price to Earnings Ratio vs Fair Ratio

What is AMC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AMC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	19.7x
Fair PE Ratio	19.4x

Price-To-Earnings vs Fair Ratio: AMC is expensive based on its Price-To-Earnings Ratio (19.7x) compared to the estimated Fair Price-To-Earnings Ratio (19.4x).

Share Price vs Fair Value

What is the Fair Price of AMC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AMC (A$17.7) is trading below our estimate of fair value (A$25.34)

Significantly Below Fair Value: AMC is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Amcor forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AMC's forecast earnings growth (2.1% per year) is above the savings rate (1.8%).

Earnings vs Market: AMC's earnings (2.1% per year) are forecast to grow slower than the Australian market (6.2% per year).

High Growth Earnings: AMC's earnings are forecast to grow, but not significantly.

Revenue vs Market: AMC's revenue (1.2% per year) is forecast to grow slower than the Australian market (5.7% per year).

High Growth Revenue: AMC's revenue (1.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AMC's Return on Equity is forecast to be high in 3 years time (27.5%)

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Past Performance

How has Amcor performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AMC has high quality earnings.

Growing Profit Margin: AMC's current net profit margins (6.7%) are lower than last year (6.9%).

Past Earnings Growth Analysis

Earnings Trend: AMC's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: AMC's earnings growth over the past year (10%) is below its 5-year average (14.8% per year).

Earnings vs Industry: AMC earnings growth over the past year (10%) underperformed the Packaging industry 10.7%.

Return on Equity

High ROE: Whilst AMC's Return on Equity (21.02%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Amcor's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AMC's short term assets ($6.2B) exceed its short term liabilities ($4.4B).

Long Term Liabilities: AMC's short term assets ($6.2B) do not cover its long term liabilities ($9.0B).

Debt to Equity History and Analysis

Debt Level: AMC's net debt to equity ratio (135.8%) is considered high.

Reducing Debt: AMC's debt to equity ratio has reduced from 529% to 159.3% over the past 5 years.

Debt Coverage: AMC's debt is not well covered by operating cash flow (19.7%).

Interest Coverage: AMC's interest payments on its debt are well covered by EBIT (11.3x coverage).

Balance Sheet

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Dividend

What is Amcor current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.80%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AMC's dividend (3.8%) is higher than the bottom 25% of dividend payers in the Australian market (2.63%).

High Dividend: AMC's dividend (3.8%) is low compared to the top 25% of dividend payers in the Australian market (6.21%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AMC has been paying a dividend for less than 10 years.

Growing Dividend: AMC has only been paying a dividend for 3 years, and since then payments have not increased.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (76.6%), AMC's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (76.6%), AMC's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.4yrs

Average management tenure

CEO

Ron Delia (51 yo)

7.33yrs

Tenure

US$10,991,148

Compensation

Mr. Ronald Stephen Delia, also known as Ron, BSc (Marketing), MBA serves as Chief Executive Officer and Managing Director of Amcor PLC (formerly, Amcor Limited) since April 17, 2015. Mr. Delia joined Amcor...

CEO Compensation Analysis

Compensation vs Market: Ron's total compensation ($USD10.99M) is above average for companies of similar size in the Australian market ($USD4.19M).

Compensation vs Earnings: Ron's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: AMC's management team is seasoned and experienced (5.4 years average tenure).

Board Members

Experienced Board: AMC's board of directors are considered experienced (6.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30