AMCOR PLC (AMCR): what the price assumes

In the published model solve dated 2026-Q2, anchored at $46.67, AMCOR PLC (AMCR) is priced for -1.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/AMCR

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 7% sits below it).

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.3%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

The disclosed units share an operating capital structure; consolidated cash-flow lenses remain coherent and the unit split is explanatory.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Amcor now sells roughly $22 billion a year of packaging across three lines: films and other flexible products at about 66% of revenue, containers, preforms and closures at about 28%, and specialty flexible folding cartons at about 7%.
• Debt is the defining feature of the post-merger company: net debt of about $13.6 billion sits near 8.7 times trailing operating income, and operating income covers the interest bill only about 2.6 times.
• The integration is the number that matters next: the fiscal 2025 annual report states the company "continues to target realizing approximately $530 million of pre-tax synergies", and the fiscal year closes at the end of June, so the full-year result in August is the first clean look at whether that is landing.

Bull Case

The defining capital decision here has already been made. Amcor bought Berry Global, paid for it largely in stock, and in doing so raised its diluted share count by "11% in fiscal year 2025, compared to fiscal year 2024". That is a real cost to existing holders, and it bought something specific: a combined group of roughly $22 billion in revenue spanning flexible films, rigid containers and closures, and specialty cartons, with the flexible business alone described in the annual report as "one of the world's largest suppliers of polymer resin, aluminum, and fiber based flexible packaging" across 210 manufacturing and support facilities in 36 countries. The question a shareholder is being asked is not whether the deal was expensive. It is whether the combined cost base can be run for less than the two separate ones.

Management has put a figure on that. The fiscal 2025 filing states the company "continues to target realizing approximately $530 million of pre-tax synergies" from the integration programme, and by the May 2026 quarter the cumulative three-year target had been lifted to $650 million with $77 million banked in the quarter itself. Against trailing operating income of about $1.57 billion, a synergy programme of that size is not a rounding item. It is roughly the difference between a business that struggles to cover its new interest bill comfortably and one that does.

The economics underneath are steadier than the headline volatility suggests, because of how packaging contracts work. The company's supply agreements are structured so that it has "one performance obligation, which is to supply packag"ing, and resin exposure is largely handed back: the filing describes passing "through the commodity price risk to customers, including through the use of fixed price swaps". A converter that passes resin through is not really taking a commodity position. It is selling conversion capacity, and conversion capacity is priced on service, footprint and switching cost rather than on the price of a barrel.

The rigid side shows what scale does when volumes arrive. Segment net sales rose to $4,137 million in fiscal 2025 from $3,308 million, an increase of $829 million or 25%, and the segment's reported profit measure improved from 7.8% to 9.1% of net sales. That is the shape of the whole bull case in miniature: revenue arriving into a fixed plant base and dropping through at a better rate than the average. Amcor's company-wide operating margin of 7.1% currently sits below what the larger listed converters earn, with Crown Holdings (CCK) at a 12.2% operating margin and Packaging Corporation of America (PKG) at 11.7%. Those are not exotic outcomes in this industry. They are what the neighbours already do, which is the most useful thing anyone can say about a margin gap.

Bear Case

The bank facilities contain a number that quietly decides how much freedom management has. The annual report states that "The covenants require the Company to maintain a leverage ratio of not higher than 3.9 times, stepping up to 4.25 times for the twelve consecutive calendar months following the consummation of an acquisition with aggregate consideration in excess of $375 million". The company reported compliance as of June 30, 2025. Compliance is not the point; headroom is. A packaging group that has just absorbed a company its own size is running a balance sheet where a bad year does not merely reduce earnings, it moves the business closer to a covenant test, and covenant tests are where lenders start pricing the conversation.

The raw leverage says the same thing without the legal language. Net debt of roughly $13.6 billion sits near 8.7 times trailing operating income, and operating income covers interest only about 2.6 times. Coverage at that level means a fifth of the operating profit line has to disappear before the interest bill starts to bite the equity, and packaging volumes do move by that much when customers destock. The company's own risk factors name the mechanism: "any significant reduction in their production requirements, or an adverse change in the terms of our supply agreements with them, could reduce our sales revenue and net profit".

The deeper problem is what the capital base earns. Return on invested capital runs at roughly 3.2% a year. The money funding that capital costs something closer to 9.3%. A company earning less on its assets than it pays for the money behind them gives value away on every incremental dollar, and any valuation approach anchored on what the business currently produces will land well under the market as a result. That is exactly the pattern here: the price sits about 3.7 times where the asset-based methods land and about 2.6 times where the earnings-power methods land. Only the peer-multiple and forward-growth methods reach it. The gap is not a puzzle, it is the merger: the acquired capital is on the books now, and the returns it was bought for are not yet in the numbers.

There is also a fragility in the arithmetic itself. The growth this business has to deliver, in order to make sense of what the market pays, is highly sensitive to the discount rate: a one-percentage-point rise in the cost of capital raises the required operating-profit growth by roughly eight and a half points. A levered, low-growth industrial is a long-duration instrument whether or not anyone describes it that way, and refinancing $13.6 billion of borrowings into a higher rate environment is where that sensitivity shows up in cash rather than in theory.

Finally, demand is not a given. The filing points to shifting consumer and regulatory attitudes, including "pressure to reduce packaging waste and the use of petrochemical components", as a source of decline in demand for certain products. Packaging is a business where the customer's own sustainability commitments can rewrite the specification, and a converter with $13.6 billion of net debt has less room to fund a retooling cycle than one without it.

Valuation

What the market is assuming here is unusually modest, which is the first surprising thing about the name. At $44.53 the shares carry about 23 times company-wide operating income, and that multiple resolves into a requirement for operating profit to grow about 3.1% a year over a five-year stage. That is essentially the pace the business has been running, not an acceleration. On the reference set the assumption reads as within range rather than stretched, and the stretch such as it is lives in persistence rather than in rate.

The methods disagree sharply, and the disagreement traces to one fact about the balance sheet. Return on invested capital runs at roughly 3.2% a year. The money behind that capital costs something closer to 9.3%. Any approach that values the company off the returns it currently produces will therefore land far under what the market is paying, and that is what happens: the price sits about 3.7 times where the asset-based methods land and about 2.6 times where the earnings-power methods land. The peer-multiple methods sit essentially level with the price, and the forward-growth methods sit above it, one of them by holding today's exit multiple flat across a seven-year projection. Read together, the pattern says the market is paying for the combined company the integration is supposed to produce, not for the returns the combined balance sheet currently generates. The normalized earnings-power calculation makes the same point from the other side: it capitalizes about $1.46 billion of five-year average operating profit with the one-time charges added back, assumes no growth at all, and reaches well under the quoted price.

Cohort position sharpens rather than settles it. On trailing figures Amcor runs a 7.1% operating margin against roughly $22 billion of revenue. Crown Holdings (CCK) converts $12.7 billion into a 12.2% operating margin and grew 7.0%; Packaging Corporation of America (PKG) runs 11.7% on $9.2 billion with 7.9% growth; Graphic Packaging (GPK) sits closer, at 7.0% on $8.7 billion, with revenue slightly down. Amcor is the largest of the group by revenue and sits in the lower half of it by margin, which is consistent with a company mid-integration and inconsistent with a company that has already captured what it paid for.

Solvency is where the whole thing is decided. Net debt of about $13.6 billion runs near 8.7 times trailing operating income; interest is covered about 2.6 times; the share count has drifted down about 1% a year over the four years to March 2026, so the dilution from the merger has not been followed by more of it. Operations are not consuming cash. The synergy programme in the annual filing, "approximately $530 million of pre-tax synergies", is roughly a third of trailing operating income, and it is the single line item that most directly changes both the coverage ratio and the multiple the market is willing to apply.

Catalysts

The May quarter was the first full read on the combination and it went better than the market expected. Revenue of $5.91 billion beat the consensus figure of $5.71 billion, and the company raised its fiscal 2026 outlook rather than reaffirming it. Free cash flow for fiscal 2026 was guided to a range of $1.5 billion to $1.6 billion. For a company carrying this much debt, the cash-flow line is the one that changes the balance sheet, and it is guided at a level that funds meaningful repayment alongside the dividend.

Synergy capture is the live number. Amcor booked $77 million of acquisition synergies in the third quarter, raised the fiscal 2026 synergy expectation to $270 million, and kept the cumulative three-year target at $650 million, split across procurement, general and administrative costs, growth and financing benefits. That is a larger number than the approximately $530 million of pre-tax synergies described in the fiscal 2025 annual report, so the programme has been scaled up rather than trimmed, which is the less common direction of travel a year after a merger of this size.

Two dates matter from here. The fiscal year ended June 30, so the fourth-quarter and full-year result lands in August and will be the first audited view of the combined group across a complete twelve months. The dividend, running at an annualized $2.60 a share paid quarterly, goes ex again in early September. Between those, the thing to watch is not the synergy headline but whether volumes hold: the integration savings are largely within management's control, and customer destocking is not.

Peer Cohorts (Per Segment, With Filing Citations)

Global Flexible Packaging Solutions / Global Rigid Packaging Solutions (reported)

• CCK (CROWN HOLDINGS, INC.)
• FY2025 10-K: …Transit Packaging segment had net sales in 2025 of $2.0 billion and segment income (as defined under Note Z to the consolidated financial statements) of $258 million. OTHER The Company's other segments ("Other") include the Company's North America tinplate businesses: food can, aerosol can, and closures, and beverage…
• FY2025 10-K: …engineering services and technical support. These capabilities facilitate (1) the identification of new and/or expanded market opportunities by working directly with customers to develop new packaging products or enhance existing packaging products through the application of new technologies that better differentiate…
• GPK (Graphic Packaging Holding Co)
• FY2025 10-K: …customer functions. The Company is organized to bring the full resources of its global and local innovation, design and manufacturing capabilities to all of its customers with the goal of delivering packaging solutions that are more circular, more functional and more convenient. The Company competes with a wide range…
• FY2025 10-K: …market positions in paperboard used to produce consumer packaging solutions, including recycled, unbleached and bleached paperboard. The Company's customers include many of the world's most widely recognized companies and brands with prominent market positions in beverage, food, foodservice and other consumer…
• PKG (PACKAGING CORP OF AMERICA)
• FY2025 10-K: …under its revolving credit facility, $1,241 million in liquidity. 1 Net income excluding special items, earnings per diluted share excluding special items, and segment EBITDA excluding special items are non-GAAP financial measures. See "Non-GAAP Financial Measures" later in this item 7. 20 Packaging segment operating…
• FY2025 10-K: …decisions made by other producers with respect to capacity and production, inflation and other general cost increases, and other competitive conditions in our industry. These factors are affected by general global and domestic economic conditions, customer purchasing decisions, and operating conditions involving our…
• BALL (BALL CORPORATION)
• FY2025 10-K: …and placing us at a competitive disadvantage compared to our competitors who may be less leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting. ​ We face competitive risks from many sources that may negatively impact our profitability. ​ Competition…
• FY2025 10-K: …mainly to large, multinational beverage, personal care and household products companies with which we have developed long-term relationships. This is evidenced by our high customer retention and our large number of long-term supply contracts. While we have a diversified customer base, we sell a significant portion of…
• IP (INTERNATIONAL PAPER COMPANY)
• FY2025 10-K: WILL The following table presents changes in the goodwill balances as allocated to each reportable business segment for the years ended December 31, 2025 and 2024 : 86 Table of Contents In millions Packaging Solutions North America Packaging Solutions EMEA Total Balance as of December 31, 2023 Goodwill $ 3,337 $ 76 $…
• FY2025 10-K: …products industry. See Note 21 - Financial Information by Business Segment of Item 8. Financial Statements and Supplementary Data for further details regarding the Company's business segments. The majority of our business is focused on creating fiber-based packaging that protects and promotes goods, enables worldwide…
• SLGN (SILGAN HOLDINGS INC)
• FY2025 10-K: …in resin composition and applications and changes in the technology for the manufacturing of custom containers. We benefit from our large scale and nationwide presence, as significant consolidation is occurring in many of our customers' markets. Through these capabilities, we are well-positioned to serve our…
• FY2025 10-K: …of dispensing and specialty closures for the fragrance and beauty, food, beverage, personal and health care, home care and lawn and garden markets. Our dispensing and specialty closures business provides customers with an extensive variety of innovative dispensing system solutions, including integrated dispensing…
• OI (O-I GLASS, INC.)
• FY2025 10-K: …competitors producing plastic containers include Amcor, Plastipak Packaging, Inc. and Silgan Holdings Inc. The Company also competes with manufacturers of non-rigid packaging alternatives, including flexible pouches, aseptic cartons and bag-in-box containers. The Company seeks to provide products and services to…
• FY2025 10-K: …cost position and driving profitable growth. The Fit to Win initiative will deliver immediate cost benefits, while the long-term strategy focuses on substantially improving the competitive position. By deepening penetration in core markets and expanding into development and seedling markets, the Company aims to…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.