Amcor Delivers Soft Fiscal 2017 Results due to Rigid Challenges; Shares Remain Overvalued
Narrow-moat Amcor delivered a poor fiscal 2017 sales result across both flexible packaging and rigid plastics, but the impact to earnings was countered by margin improvement in both segments. We had forecast revenue growth of 1.5%, so the fall of 3.4% to USD 9.1 billion dragged underlying net profit of USD 701 million below our expectation of USD 711 million. Shares in Amcor remain overvalued, trading at a 20% premium to our unchanged fair value estimate of AUD 13.40 per share.Amcor’s flexible ...
Amcor is a packaging company. Co. has the following reportable segments: Amcor Rigid Plastics, which manufactures rigid plastic containers for a range of primarily beverage and food products; Amcor Flexibles, which represents the aggregation of four operating segments of which each manufactures flexible and film packaging for their respective industries; as well as Other/Investments, which holds Co.'s equity accounted investments in the associate AMVIG Holdings Limited (AMVIG) and the joint venture Discma AG (Discma). AMVIG is mainly involved in the manufacture of tobacco packaging while Discma's operations primarily relate to the development and licensing of packaging product development.
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