Shares in global packaging company Amcor have plummeted following the release of its fourth-quarter results. At 12.30pm AEST, Amcor’s stock price was down 9.9 per cent to $13.57. Amcor specialises in developing and manufacturing responsible packaging solutions for food, beverage, pharmaceutical, medical, home, and personal care products. The company operates across more than 40 countries.
According to E&P Financial research head Cameron McDonald, Amcor’s fourth-quarter earnings before interest and taxes (EBIT) fell short of expectations. Weaker volumes in North America significantly impacted the results, causing full-year earnings to slightly lag forecasts. Volumes in flexibles dropped 1.5 per cent, while rigids saw a 2 per cent decline, with the North American beverage and discretionary markets showing particular softness.
The fourth quarter also faced increased costs and higher corporate expenses, with the rigids segment experiencing the most substantial EBIT miss. McDonald noted the challenging demand in the North American market, particularly for discretionary items. In response, Amcor has initiated the divestment of its North American beverage and other ancillary businesses. This move is expected to enhance portfolio quality, reduce debt, and support earnings growth from a lower base.
Despite the challenging underlying trends, McDonald believes that integration synergies and potential buybacks could underpin longer-term value. E&P Financial forecasts Amcor’s earnings per share (EPS) for FY25 at US79.4¢, slightly below the company’s guidance, with a valuation of $16.25 per share.
