A Look at Amcor (NYSE:AMCR) Valuation Following Mixed Q4 Results and Swing to Net Loss

Amcor (NYSE:AMCR) just released its earnings for the fourth quarter, and the reaction has been immediate. While the company posted a jump in sales compared to this time last year, the real headline is the swing from a profit of $257 million to a net loss of $39 million. For shareholders and potential investors watching the packaging giant, this earnings update might raise big questions about how the market is pricing in both risk and opportunity going forward.

It has been a fairly bumpy ride for Amcor all year. Despite reporting annual revenue growth, the stock has declined around 20% over the past year, and momentum has generally faded as the months went by. Other recent updates, including annual earnings trends, reveal a similar story with solid sales gains, but now a hit to the bottom line that will likely concern those looking for consistent profitability.

With shares trading sharply lower than a year ago and earnings volatility now in the mix, some may wonder whether Amcor is becoming a value play, or if the market is right to be cautious about its prospects for a turnaround.

Most Popular Narrative: 22.9% Undervalued

According to community narrative, Amcor is currently trading well below what analysts see as its fair value. The bullish stance is built on projected strong earnings growth and margin expansion from strategic initiatives and integration efforts.

“The integration of Berry Global with Amcor is expected to yield $650 million in synergies by fiscal 2028 (with $260 million in fiscal 2026), primarily through cost reduction, procurement optimization, and operational efficiencies. These factors are anticipated to support sustained EPS and margin expansion.”

Want to know what’s fueling this optimistic price target? The narrative reveals a profit and revenue outlook that could change the landscape for Amcor’s valuation. There is a key set of financial projections and bold assumptions driving these forecasts. If you are curious how analysts connect the dots between today’s price and a much higher fair value, you will want to see the numbers behind the story.

Result: Fair Value of $11.04 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing weak consumer demand and uncertainty in Amcor’s North American beverage business could challenge the company’s path to consistent growth and higher margins.

Find out about the key risks to this Amcor narrative.

Another View: Market-Based Multiples Tell a Different Story

Looking at Amcor through a market-based lens, the current share price appears expensive compared to global industry averages. This raises real doubts about whether the recent discount is as attractive as it seems. Could the optimism be misplaced?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Amcor for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Amcor Narrative

If you have your own perspective or want to interpret Amcor’s story based on your own analysis, you can put together your own narrative in just a few minutes. Do it your way.

A great starting point for your Amcor research is our analysis highlighting 3 key rewards and 5 important warning signs that could impact your investment decision.

Ready for More Smart Investing Ideas?

Don’t let the next opportunity pass you by while focusing on a single stock. There are remarkable companies waiting to be noticed, and the Simply Wall Street Screener highlights some of the most compelling themes in today’s market. Choose your edge and stay ahead of the crowd with these fresh investment ideas:

• Uncover earnings power with stocks trading below their intrinsic value by using our curated list of undervalued stocks based on cash flows.
• Fuel your growth portfolio with breakthrough medical technology leaders through the selection of healthcare AI stocks.
• Secure steady returns by focusing on companies offering above-average yields and exploring dividend stocks with yields > 3%.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com