Analysts Have Been Trimming Their Amcor plc (NYSE:AMCR) Price Target After Its Latest Report

Amcor plc (NYSE:AMCR) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to US$10.42 in the week after its latest third-quarter results. It was an okay result overall, with revenues coming in at US$3.7b, roughly what the analysts had been expecting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Amcor

Following last week's earnings report, Amcor's 18 analysts are forecasting 2024 revenues to be US$15.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 4.4% to US$0.64 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$15.1b and earnings per share (EPS) of US$0.74 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The average price target fell 7.5% to US$10.96, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Amcor at US$12.50 per share, while the most bearish prices it at US$9.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Amcor's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Amcor's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.1% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Amcor.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Amcor's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Amcor's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Amcor analysts - going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Amcor you should be aware of, and 2 of them shouldn't be ignored.

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

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.