Amcor – High Conviction Buy

 Amcor is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The FY19 result was slightly below expectations. The key highlight was the announcement of the US$500m on-market buyback.

A combination of cost synergies post the Bemis acquisition and the share buyback will help underpin near-term earnings.

Buy $13.85

 

Amcor – Buy “High Conviction”

Amcor and is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We move to a “high conviction” buy on the stock and see long term value.

Buy Amcor within the $14 – $14.50 range.

 

Amcor – Buy Signal

Amcor is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The defensive earnings stream and the prospect of a share buyback next year will help to underpin any near-term share price weakness.

Buy Amcor within the range indicated below.

Amcor – Buy

Amcor is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The stock made a recent high at $16.75 and has since corrected back to $15.50. The share price has found buying support and the short-term indicators have turned positive.

 

Amcor – Opportunity Builds

Amcor is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The stock made a high last week at $16.75 and has since corrected back to $15.50.  Investors should add AMC to their watchlist and we suggest looking for an entry level once the short term indicators turn positive.

 

 

Amcor – Take Profit

Amcor strong share price movement suggests investors are
pricing in an earnings upgrade, but we think a significant EPS upgrade
is unlikely and investors should now take profit or sell covered calls.

Stock price is up 5% from the recent signal low.

 

 

Amcor – Valuation Review

Amcor is now under Algo Engine buy conditions, following the higher low formation at $15.75.

Looking out to FY20 we have Amcor generating a combined revenue of $13.5bn, EBIT $1.65bn, delivering 8% EPS growth and trading on a 4.4% yield.

We see value at $15, however, with the defensive nature of the Amcor business, buying interest is likely to build closer to $15.50.

 

 

 

Amcor – Opportunity Approaching

Amcor will begin the integration process of the Bemis acquisition and work through the synergy cost savings, which are targeted to deliver US$180mn in savings.

The euphoria of the “search for yield” in the market, (especially in the last few months following US yields trading lower), has seen Amcor’s share price trade at a premium to global peers. We like the long-term prospects of the company and feel AMC’s relatively defensive earnings profile will remain attractive in uncertain markets.

We suggest adding this one to your watch list and we’ll highlight on the blog when the stock switches from sell to buy conditions.

Our target is to buy AMC closer to $15.00

 

 

Amcor – Update on Bemis Transaction

Amcor has released the scheme booklet for its all-stock acquisition of Bemis with the transaction unanimously recommended by the Boards of both companies.

The Bemis transaction is expected to be completed on 15 May 2019.

AMC reported a solid 1H19 result in February and forecast underlying EPS growth of 3 – 4% supported by US$180m in cost synergies to be realized from the merger over the next 3 years.

Amcor trades on a 4.5% forward yield.  In FY20 we expect the combined revenue to exceed US$14b and EBIT to increase to US$1.7b.

We remain buyers at or near $14.50.

 

 

 

 

 

 

Amcor Earnings Update

AMC reported 1H19 sales of US$4.6bn, EBITDA of US$678mn and underlying NPAT of US$330mn.

These numbers reflect a relatively flat outcome, based on the same time last year. The key for growth will be the integration of the Bemis business and the $180mn in cost synergies.

Amcor should return to a 3 – 6% EPS growth environment from next year, this supports the 4.4% dividend yield.