Analyst Ghansham Panjabi of Robert W. Baird maintained a Hold rating on Amcor (AMCR – Research Report), retaining the price target of $10.00.
Ghansham Panjabi has given his Hold rating due to a combination of factors including the gradual improvement in volume dynamics and the success of cost-saving initiatives. Panjabi acknowledges the recent recovery from significant inventory destocking that affected Amcor in the first half of the fiscal year, which suggests a positive trajectory. However, he remains cautious due to the mixed fundamental performance across Amcor’s diverse portfolio. Furthermore, while the third fiscal quarter earnings were above consensus, and there has been a directional improvement in volume with a notable year-over-year increase in EBIT margins, the overall market sentiment is tempered by lingering volume softness and leadership transition uncertainties.
Despite the in-line outlook and Amcor’s efforts in cost reduction, contributing to a better than expected EBIT for the Flexibles segment, Panjabi maintains a Neutral stance. This caution is driven by the underlying variability in performance across operating segments, with Rigids showing a considerable decline. Additionally, the Hold rating reflects a measured optimism, recognizing the structural savings program’s impact on future earnings, yet factoring in the persistent challenges in reigniting commercial sales momentum. The $10 price target set by Panjabi is based on approximately 13 times the projected FY25 earnings per share, indicating a watchful perspective on Amcor’s ability to sustain its recent performance improvements amidst a broader context of market and internal uncertainties.
Panjabi covers the Consumer Cyclical sector, focusing on stocks such as Crown Holdings, O-I Glass, and Graphic Packaging. According to TipRanks, Panjabi has an average return of 7.5% and a 60.92% success rate on recommended stocks.
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Amcor (AMCR) Company Description:
Amcor Plc operates as a holding company, which engages in the provision of consumer packaging business. It operates through the Flexibles and Rigid Packaging segments. The Flexibles segment develops and supplies flexible packaging globally. The Rigid Plastics segment manufactures rigid plastic containers and related products. The company was founded on July 31, 2018 and is headquartered in Warmley, the United Kingdom.
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