Amcor’s shares (ASX:AMC) are trading 3.29% in the green so far this year, as news that Jefferies has upgraded the stock from a Hold to a Buy rating helped shares maintain a 0.38% rise on an otherwise mildly red day. Amcor’s stocks price target was raised substantially, from $15.70 to $20.50. This decision comes as the share price surpasses the old target, with a close at $15.71.

The upgrade follows Amcor’s recent acquisition of Bemis Company (BERY), which is expected to significantly benefit Amcor’s growth trajectory. According to Jefferies analyst Ramoun Lazar, the BERY acquisition was executed timely and at a reasonable price, with expected synergies poised to enhance Amcor’s market position.

Amcor’s overall health is deemed GOOD with a steady dividend yield of 5.25%, marking this as the sixth consecutive year of dividend increases. This stability is underpinned by robust profitability metrics, including a return on equity of 20% and an EBITDA of $1.9 billion over the last twelve months.

The BERY acquisition is anticipated to bolster earnings growth, thereby improving volume growth performance. The forecasted price-to-earnings (P/E) ratio for fiscal 2026 stands at 12.5 times, or 11.5 times when BERY is included, suggesting a potential undervaluation of Amcor’s shares.

Amcor recently reported a 2% increase in overall volumes and a 5% year-over-year growth in adjusted earnings per share for the first quarter of FY 2025. The full-year guidance projects adjusted earnings per share between $0.72 and $0.76, alongside an adjusted free cash flow ranging from $900 million to $1 billion.

 

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