AMCR Amcor
Mature packaging giant; value hinges on Berry synergies and deleveraging, roughly fairly priced near $42.
The story
Amcor is the global leader in flexible and rigid consumer packaging. Its 2025 all-stock merger with Berry Global roughly doubled its scale, which explains the jump in revenue to $23.5B along with higher leverage and a large goodwill balance. The business is mature and defensive, with low-single-digit volume growth tied to food, beverage and healthcare staples. Over the next few years, value depends on delivering the roughly $650M of promised synergies and paying down debt, not on top-line growth.
TTM revenue already reflects the full Berry contribution, so organic growth of about 2-3% (volumes plus pricing) is the right base, not the acquisition-inflated 17% CAGR. Reported margin is 8.3% after integration costs and deal amortization; synergies should lift it back to Amcor's historical GAAP level of about 10.5%, not to the higher adjusted-EBIT figures management reports. The reported 0.91 sales-to-capital is depressed by merger goodwill, so incremental capital needs in a slow-growth, maintenance-capex business are better captured by 1.5.
Value drivers
| Revenue growth (Y1) | 2.5% |
| Terminal growth | 2.5% |
| Forecast horizon | 5y |
| Target operating margin | 10.5% |
| Years to target margin | 4 |
| Sales-to-capital | 1.50 |
| Beta | 1.05 |
| Failure probability | 2.0% |
| Cost of capital (WACC) | 9.5% |
| Terminal WACC | 9.4% |
Valuation bridge
| PV of explicit FCFF | 6.56B |
| PV of terminal value | 16.59B |
| Equity value | 10.04B |
| ÷ shares → per share | $21.72 |
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 24.09B | 2.5% | 8.9% | 1.84B | 391.77M | 1.44B | 1.32B |
| 2 | 24.70B | 2.5% | 9.4% | 2.00B | 401.56M | 1.60B | 1.33B |
| 3 | 25.31B | 2.5% | 10.0% | 2.16B | 411.60M | 1.75B | 1.33B |
| 4 | 25.95B | 2.5% | 10.5% | 2.34B | 421.89M | 1.92B | 1.33B |
| 5 | 26.59B | 2.5% | 10.5% | 2.40B | 432.44M | 1.97B | 1.25B |
Key risks
- Synergy shortfall or integration missteps across a much larger footprint
- Net debt of about $12.9B leaves little room if volumes stay weak in consumer staples
- Regulation and substitution away from plastics (EPR fees, single-use bans) pressuring rigid and flexible volumes
Catalysts
- Visible synergy capture and margin expansion in FY26-FY27 results
- Deleveraging toward about 3x net debt/EBITDA, enabling buybacks or dividend growth