Amcor’s US dollar share price has rallied 15% since March, and its AU dollar share price subsequently 25%, driven by a price-earnings ratio re-rating. Noting valuation price is now above sector peers, Credit Suisse suggests the stock is fully valued.
The company has renewed its focus on organics growth, and intends to increase its capital expenditure by 10-15% annually until its reaches 4-5% of sales.
The Neutral rating is retained and the target price increases to $17.85 from $17.00, largely accounting for the impact of the weaker Australian dollar.
Sector: Materials.
Target price is $17.85.Current Price is $18.40. Difference: ($0.55) – (brackets indicate current price is over target). If AMC meets the Credit Suisse target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
