Amcor stock price target lowered to $10 from $10.30 at BofA Securities

Investing.com - BofA Securities has lowered its price target on Amcor Plc. (NYSE:AMCR) to $10.00 from $10.30 while maintaining a Buy rating on the packaging company’s stock. Currently trading at $8.76, near its 52-week low of $8.37, Amcor offers a substantial 5.13% dividend yield. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations.

The firm cited Amcor’s fourth-quarter performance as a likely "trough" relative to expectations, with overall volumes declining 1.7% compared to BofA’s forecast of 0.5% growth. Flexible packaging volumes fell 1.5% against expectations of 0.5% growth, with margins reaching only 14.1% versus the 15.5% estimate. InvestingPro data shows the company maintains a GOOD financial health score despite revenue declining 2.29% over the last twelve months.

Rigid packaging volumes declined 2%, with North American beverage packaging experiencing a more significant drop of over 5%. The segment faced operating issues, including limited throughput capacity during the peak seasonal quarter, and weak price/mix trends of -4%, resulting in a $20 million year-over-year negative impact on earnings before interest and taxes.

BofA Securities maintains its Buy rating based on Amcor’s valuation and expectations for "meaningful" performance improvements in upcoming quarters. The firm noted that the lack of incrementally positive news on synergies and the gradual approach to strategic review contributed to recent share price weakness.

According to BofA, Amcor plans to stabilize its North American beverage operations over the next two quarters before considering bringing this business to market.

In other recent news, Amcor Plc. reported its fourth-quarter earnings, which did not meet analyst expectations. The company posted adjusted earnings per share of $0.20, falling short of the consensus estimate of $0.21, primarily due to a 2% decline in volume in both its Flexibles and Rigid packaging segments. Despite these results, BofA Securities maintained a Buy rating on Amcor stock, citing potential synergies from the recent acquisition of Berry Global as a key factor for future performance. The firm believes these synergies, along with the current valuation, could bolster share performance moving forward. Meanwhile, Raymond James reiterated its Market Perform rating, reflecting the weaker-than-expected volume performance. Amcor also provided an optimistic forecast for fiscal 2026, suggesting strong growth following the Berry Global acquisition. These developments highlight the mixed reactions from analysts and the company’s strategic focus on future growth.

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