Amcor has been a stock that has weighed on our portfolios over recent times but as it comes good now we definitely don’t intend to cut it. This packaging business is an economically sensitive value name, which, with more than 50% of its revenue generated from the US in FY25, is perfectly positioned for the current economic backdrop, especially in the US. The stock continues to trade at a hefty discount to its historical average valuation while yielding close to 6%, mostly franked.
Unlike much of the market, the packaging company hasn’t yet regained much of its weakness as the Iran war threatened global economic growth, but we believe this is being addressed through June and July. However, we mustn’t lose sight of why AMC has struggled over the last year:
- Earnings disappointments weighed on sentiment. Amcor missed FY25 fourth-quarter earnings and revenue expectations, while FY26 EPS guidance came in below consensus, triggering a sharp share price sell-off.
- Soft end-market demand persisted. Weaker consumer packaged goods volumes, GLP-1-driven changes in food consumption and broader macro headwinds continued to weigh on packaging demand through FY26.
- Berry integration added uncertainty. Concerns around slower-than-expected synergies, higher debt and rising interest costs tempered earnings expectations following the Berry Global acquisition.
Operationally, the business looks to have turned the corner, although it’s worth noting AMC has delivered average performance compared to its US peers. Importantly, he integration of Amcor’s US$8.4bn all-stock acquisition of Berry Global, which was completed in April 2025, is tracking ahead of schedule, with US$170m of synergies delivered in the first nine months of FY26 and full-year guidance lifted to US$270m, which keeps the company on track to achieve its US$650m synergy target by FY28.
- We are initially targeting the $70 area for Amcor, around 10% higher – MM holds AMC in our Growth and Income Portfolios.
MM is long and bullish towards AMC around $64
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