Morgan Stanley analyst Andrew Scott upgraded the rating on Amcor PLC Shs Chess Depository Interests (AMC – Research Report) to a Buy yesterday, setting a price target of A$20.31.
Andrew Scott has given his Buy rating due to a combination of factors that highlight Amcor PLC’s potential for growth and value creation. The recent transaction with Berry Global Group (BERY) is seen as a strategic move that complements Amcor’s existing product and geographic portfolio, setting a foundation for future earnings growth and cash flow generation. The transaction is expected to result in significant earnings per share (EPS) accretion, especially if the targeted US$650 million in synergies are realized.
Amcor’s history of successfully executing acquisitions and achieving synergy targets further supports Scott’s positive outlook. The company’s previous acquisition of Bemis exceeded synergy expectations by approximately 10%, showcasing its capability in this area. Moreover, the market appears to be undervaluing the potential impact of the BERY transaction, as it is not yet reflected in consensus estimates. With pro-forma forecasts indicating attractive valuation metrics, such as a FY26 estimated price-to-earnings ratio of 11.2x and an EV/EBITDA of 8.4x, Scott believes there is significant upside potential for Amcor’s stock.
According to TipRanks, Scott is a 4-star analyst with an average return of 5.1% and a 52.90% success rate. Scott covers the Basic Materials sector, focusing on stocks such as James Hardie, Bluescope Steel , and Orica Limited.
In another report released on April 21, Citi also maintained a Buy rating on the stock with a A$19.00 price target.