Does Amcor’s Recent Rebound Signal a Compelling 2025 Valuation Opportunity?

• Wondering whether Amcor at around $8.32 is a value opportunity or a value trap? This breakdown will walk through what the current price really implies.
• Despite a tough run over the last year with a -14.0% return and -11.0% year to date, the stock has shown some life recently, gaining 5.7% over the last month even after a -3.5% slip in the past week.
• That recent volatility is unfolding against a backdrop of ongoing packaging industry shifts, from sustainability regulations to changing consumer demand, which can reshape investor expectations quickly. At the same time, Amcor has been in the spotlight for its focus on recyclable and lightweight packaging solutions, moves that could support longer term growth even if sentiment is still catching up.
• Right now, Amcor scores a 3/6 on our valuation checks, suggesting there are some signs of undervaluation but also a few yellow flags. In the sections ahead we will unpack what different valuation methods say about the stock and hint at an even better way to think about its fair value by the end of the article.

Amcor delivered -14.0% returns over the last year. See how this stacks up to the rest of the Packaging industry.

Approach 1: Amcor Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and discounting those dollars back to today. For Amcor, the model uses a 2 stage Free Cash Flow to Equity approach, based on cash flow projections in $.

Amcor’s latest twelve month free cash flow is about $880.2 Million. Analyst estimates used in this model project this figure to increase over time. By 2028, projected free cash flow in the model reaches roughly $2.18 Billion, with further growth extrapolated through 2035 using more moderate assumptions once analyst forecasts run out.

When all those projected cash flows are discounted back to the present, the model arrives at an intrinsic value of about $20.72 per share. Compared with the current price around $8.32, this DCF output suggests the stock is trading at roughly a 59.8% discount to the model’s estimated fair value, based on the inputs and assumptions described.

Result: UNDERVALUED (model-based)

Our Discounted Cash Flow (DCF) analysis suggests Amcor is undervalued by 59.8%. Track this in your watchlist or portfolio, or discover 913 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Amcor.

Approach 2: Amcor Price vs Earnings

For consistently profitable companies like Amcor, the price to earnings (PE) ratio is a useful way to gauge how much investors are paying for each dollar of current profits. In general, faster growth and lower perceived risk justify a higher PE. Slower growth, more leverage, or business uncertainty usually call for a lower, more conservative multiple.

Amcor currently trades on a PE of about 32.9x, which is well above both the Packaging industry average of roughly 15.6x and the broader peer group average of around 20.1x. To move beyond simple comparisons, Simply Wall St also calculates a proprietary Fair Ratio for each stock. This metric estimates what a reasonable PE should be after factoring in company specific elements like earnings growth prospects, profitability, industry dynamics, market cap and risk profile.

For Amcor, the Fair Ratio is 24.8x, meaning the shares trade meaningfully above the level suggested by these fundamentals. On this basis, even allowing for its strengths, the stock looks somewhat expensive relative to what its risk and growth characteristics would typically warrant.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Amcor Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to write the story you believe about a company and directly connect that story to forecasts for its future revenue, earnings, margins and, ultimately, a fair value estimate that you can compare to today’s price.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy, interactive tool to spell out their assumptions, turn them into a financial forecast, and then see whether their Fair Value suggests Amcor is a buy (when Fair Value is above Price) or a sell or avoid (when Fair Value is below Price). These views are automatically updated as new news, earnings and guidance come in.

For example, one Amcor Narrative might lean bullish and arrive at a fair value near 10.41 dollars per share by assuming strong Berry Global synergies, rising margins and healthy revenue growth. A more cautious Narrative might sit closer to the current market price by baking in weaker demand, slower synergy realization and a lower future PE, showing how different perspectives on the same facts can lead to very different conclusions about whether to act now or wait.

Do you think there's more to the story for Amcor? Head over to our Community to see what others are saying!

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.

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