Amcor (AMCR) Buys Flexible Packaging Plant in Central Europe
Amcor plc AMCR announced that it has acquired a flexible packaging plant located in the Czech Republic, featuring state-of-the-art specialized equipment for attractive segments, including coffee and pet food. This move will aid AMCR in capitalizing on strong demand and a growing customer base across its flexible packaging network in Europe.
The plant is a greenfield development commissioned by DG Pack in 2019. It boasts state-of-the-art specialized equipment catering to attractive segments, including coffee and pet food. Amcor can significantly scale up operations and establish a highly efficient production hub.
Backed by its strong balance sheet and an annual free cash flow of above $1 billion, Amcor continues to invest in growth and expand capacity in higher-growth, higher value-added plus more packaging-intensive segments like healthcare, protein, pet food, premium coffee and hot fill beverage containers. AMCR has a leading position in each of these categories, which together generate more than $4 billion of annual sales.
The growth rates in all these segments are higher than the average in the broader consumer markets, indicating a significant growth potential. Also, there exists several opportunities to bring innovation and growth in various aspects in these categories, given the need for higher-performance features, such as barrier, heat resistance and resealability, which in turn, drive margins.
Amcor recently reported fourth-quarter fiscal 2022 (ended Jun 30, 2022) adjusted earnings per share (EPS) of 24 cents, which came in line with the Zacks Consensus Estimate. The bottom line increased 4% year over. Total revenues increased 13% year over year to $3,909 million in the reported quarter and beat the Zacks Consensus Estimate of $3,815 million.
AMCR expects adjusted EPS growth of approximately 3-8% on a comparable constant currency basis in fiscal 2023, comprising approximately 5-10% growth from the underlying business performance and a benefit of approximately 2% from share repurchases. EPS is expected to be in the range of 80-84 cents. Amcor projects adjusted free cash flow of around $1-$1.1 billion.
In fiscal 2023, AMCR estimates a negative impact of approximately 2% related to the planned sale of its three plants in Russia and an unfavorable impact of approximately 2% pertaining to a stronger US dollar.
Share Price Performance
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In the past year, Amcor’s shares have declined 1.6% compared with the industry’s fall of 0.3%.
Zacks Rank & Stocks to Consider
Amcor currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies, Inc. AIT, Sonoco Products Company SON and Greif Inc. GEF. While AIT and SON sport a Zacks Rank #1, GEF carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial has an estimated earnings growth rate of 10.9% for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has been revised 6% upward.
Applied Industrial pulled off a trailing four-quarter earnings surprise of 22.8%, on average. AIT’s shares have rallied 28% in a year.
Sonoco has an expected earnings growth rate of 78.3% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 18% in the past 60 days.
Sonoco has a trailing four-quarter earnings surprise of 4.06%, on average. SON’s shares have moved up 1% in the past year.
Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised 17% upward.
Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. GEF’s shares have risen 16.5% in the past year.
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