George Staphos, an analyst from Bank of America Securities, maintained the Buy rating on Amcor. The associated price target was lowered to $10.00.
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George Staphos has given his Buy rating due to a combination of factors related to Amcor’s potential for growth and its current valuation. Despite recent challenges in volume growth and execution, particularly in North America, the acquisition of Berry Global is seen as a transformative move that could enhance Amcor’s portfolio and earnings. This acquisition is expected to improve scale and margins in both the Rigids and Flexibles segments, which could lead to better growth prospects.
Furthermore, Amcor’s current valuation presents an opportunity, as even minor improvements in market growth or margin expectations could significantly impact its stock price. With a free cash flow yield of 9.7%, which could rise to 10.8% when accounting for one-time costs, the market appears to undervalue Amcor. Additionally, potential deconsolidation of non-core revenues could improve margins and returns, making the stock an attractive buy at its current price.
Staphos covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Greif Class A, and Packaging. According to TipRanks, Staphos has an average return of 4.5% and a 51.04% success rate on recommended stocks.
In another report released on September 10, Jefferies also reiterated a Buy rating on the stock with a $11.67 price target.