Amcor logged a -3.2% change during today's afternoon session, and is now trading at a price of $11.62 per share. The S&P 500 index moved -0.3% and the Nasdaq posted a -0.3% change. AMCR's trading volume is 3,123,506 compared to the stock's average volume of 7,390,877. Let's dive right into a brief fundamental analysis of Amcor.
Amcor shares moved 1.8% over the last 52 weeks, with a high of $13.61 and a low of $10.42. During this time, the stock outperformed the S&P 500 index by 9.5%. As of January 2022, the company's 50-day average price is $12.0. Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The large-cap Consumer Cyclical company has 44,000 full time employees and is based in Zurich, Switzerland. Amcor has returned a 4.0% dividend yield over the last 12 months.
Good EPS Growth with a Highly Leveraged Balance Sheet:
| 2019-06-30 | 2020-06-30 | 2021-06-30 | 2022-06-30 | |
|---|---|---|---|---|
| Revenue (MM) | $9,458 | $12,468 | $12,861 | $14,544 |
| Revenue Growth | n/a | 31.82% | 3.16% | 13.09% |
| Gross Margins | 19.0% | 20.3% | 21.2% | 19.4% |
| Gross Margins Growth | n/a | 6.84% | 4.43% | -8.49% |
| Operating Margins | 9.8% | 8.9% | 11.0% | 10.1% |
| Operating Margins Growth | n/a | -9.18% | 23.6% | -8.18% |
| Earnings Per Share | $0.36 | $0.38 | $0.6 | $0.53 |
| EPS Growth | n/a | 5.56% | 57.89% | -11.67% |
| Free Cash Flow (MM) | $444 | $985 | $993 | $999 |
| FCF Growth | n/a | 121.83% | 0.84% | 0.6% |
| Capital Expenditures (MM) | -$332 | -$400 | -$468 | -$527 |
| Net Debt / EBITDA | 3.94 | 3.05 | 2.7 | 2.68 |
Amcor Is Currently Fairly Valued:
Compared to the Consumer Cyclical sector's average of 24.11, Amcor has a trailing twelve month P/E ratio of 20.7 and, according to its EPS guidance of 0.83, an expected P/E ratio of 14.0. Amcor's PEG ratio is 0.76 based on its 27.25% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Amcor's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.59, which suggests that the company's shares are actually overvalued.
Amcor's P/B ratio is 4.4 compared to its sector average of 3.11. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 119.9% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 0.47 * 2.638) = $5.28
Amcor's elevated P/B ratio notwithstanding, the company's strong cash flows and healthy debt levels factor towards it being fairly valued.
Amcor Is the Subject of Mixed Market Indicators:
7 analysts are following Amcor and have set target prices ranging from $10.75 to $13 per share. On average, they have given the company a rating of hold. At the current price of $11.62, AMCR is trading -2.31% away from its average analyst target price of $11.89 per share, implying an analyst consensus of some upside potential for the stock.
The company has an average amount of shares sold short since 2.1% of the company's shares are tied to short positions. Institutions own 48.9% of Amcor's shares, while the insider ownership rate stands at 0.93%. The biggest shareholder is Blackrock Inc. with a 8% stake in the company worth approximately $1,358,848,928.
