Packaging giant Amcor Ltd (ASX: AMC) delivered a stellar set of quarterly numbers on the face of it this week, but there's a good reason to look to the experts for guidance in this case.
That's because it was the first full quarter when Amcor has been operating as a combined business with Berry Global, which it acquired in an $8.4 billion deal first announced in late 2024.
So back to the results – Amcor reported net sales of $5.75 billion, up 68%, and adjusted EBITDA of $909 million, up 92%.
So you can see that while the numbers look impressive, they don't really make a whole lot of sense when compared against the same period in the previous financial year.
Cost savings to flow
Amcor chief executive officer Peter Konieczny was certainly positive, saying the combined business was "gaining traction with synergy realisation'', and the company has "clear line of sight to delivering at least $260 million of synergy benefits in fiscal 26".
The shares also traded moderately higher on the news, and held those gains on Friday, up 0.7% in morning trade to $12.88.
More share price upside?
So where to from here for Amcor shares?
We've had a look at research notes written by the teams at Jarden and Macquarie, and both are resoundingly positive about where they think the stock will go over the next 12 months.
Jarden has restarted covering the stock, and said its first quarter earnings per share came in around the midpoint of management's guidance, "which we see as a critical element to restoring investor trust''.
The Jarden team went on to say:
The result demonstrated that volumes across the group continued to soften, but cost control efforts and synergies helped offset earnings downside.
The Jarden team said there were several risks ahead for the company, including the ability to continue to offset volume weakness with cost cutting and the large amount of debt Amcor was carrying.
But they said they believed the shares had, "de-rated sufficiently to provide appealing risk/reward for investors''.
The Jarden analysts have a price target of $15.90 on the stock, and factoring in dividends, are projecting a total shareholder return of 30.6%.
Macquarie analysts are even more bullish, with a price target of $17.42 on the stock, and a total shareholder return forecast of 40.5%.
The Macquarie team said Amcor has a strong record in terms of delivering on synergies, and delivery of these was the key driver in their valuation of the company.
They said management presented "confidently" on the synergy front, and the savings should continue to ramp up through the second half.
