Amcor Earnings: Recovery Gaining Momentum as Volume Continues to Improve

Narrow-moat Amcor provided updated earnings guidance following a stronger-than-expected fiscal third quarter and an improved outlook for the remainder of fiscal 2024. We raise our fair value estimate by 5% to AUD 17.80/USD 11.50 from AUD 17/USD 11 and our adjusted earnings per share estimate to USD 0.69 from USD 0.67 for fiscal 2024, at the bottom end of updated guidance. Our improved near-term forecast is driven by a small uplift in operating margin from recent cost-saving and restructuring programs and a sooner-than-expected recovery in volume. We now forecast a low-single-digit increase in volume from fiscal 2025 versus a low-single-digit decline previously. Beyond this, we maintain our volume and price growth assumptions.