Stock Analysis | Amcor Outlook - Mixed Signals Amid Dividend Events and Weak Technicals

Market Snapshot

Headline Takeaway: Amcor (AMCR) is showing a weak technical outlook with a score of 4.92, but recent dividend events and positive analyst activity provide some optimism.

News Highlights

Here are some recent headlines that may influence Amcor's market performance:

• Ukraine-Russia war update: North Korea reportedly sent 20,000 containers of ammunition to support Russia's war effort, which could indirectly affect global economic sentiment and equity markets.
• EPE USA's sustainable packaging efforts: EPE USA is gaining attention for its work on reusable and recyclable packaging solutions. This trend aligns with growing consumer demand for eco-friendly practices and could impact the broader packaging industry, including Amcor.
• China’s factory activity: China’s May factory activity index rose to 49.5, still below the 50 threshold for contraction, but indicating some improvement. This could have a positive ripple effect on global manufacturing and supply chains.

Analyst Views & Fundamentals

Amcor's recent analyst activity and fundamental data offer a mixed picture:

• Simple average rating: 3.00, indicating a generally neutral outlook.
• Weighted rating: 2.08, reflecting a more cautious stance when factoring in historical performance.
• Rating consistency: Analysts are divided, with a recent "Neutral" rating from Baird, which has a perfect historical win rate of 100% but with a negative average return (-4.35%).
• Price trend alignment: The current price is down by 4.71%, aligning with the neutral to weak market expectations.
• Key fundamental values:
  • Gross profit margin: 19.49% (model score: 2.0)
  • Net cash flow from operating activities / Operating revenue: 2.41% (model score: 1.0)
  • Cost of sales ratio: 80.51% (model score: 1.0)
  • Net assets per share (growth rate compared to beginning of year %): -2.50% (model score: 2.0)

Money-Flow Trends

Amcor’s recent fund-flow patterns indicate a negative overall trend, with money flowing out across most investor categories:

• Big-money (large and extra-large investors): Inflow ratios hover just below 50%, suggesting that institutional investors remain cautious.
• Retail (small and medium investors): Slightly more positive, but still bearish, with inflow ratios at 48% and 49%, respectively.
• Fund-flow score: 7.75, which is considered good based on our internal diagnostic score (0-10).

Key Technical Signals

Amcor’s technical indicators are mixed, with both bearish and bullish signals present in recent days:

• WR Oversold: Score: 3.2 – Internal diagnostic score indicates a moderate positive bias, though returns have been mixed historically.
• Ex-Dividend Date: Score: 7.7 – High internal diagnostic score, with a perfect historical win rate of 100% and average return of 1.27%.
• Dividend Record Date: Score: 7.7 – Similar to Ex-Dividend, this date is a strong positive signal.
• Marubozu White: Score: 1.0 – A bearish pattern with low internal diagnostic strength, historically linked to a 30.77% win rate and -1.44% average return.

Recent Chart Patterns:

• On September 5, the WR Oversold indicator, along with both the Ex-Dividend and Dividend Record Dates, signaled potential volatility and earnings-related optimism.
• On August 29, the Marubozu White candle appeared, suggesting bearish momentum.

Key Technical Insight: The overall trend is described as Weak technology, need to be cautious. Momentum is mixed, with long and short signals in balance. Investors are advised to monitor market changes closely.

Conclusion

Amcor is in a period of transition, marked by mixed technical signals and a weak fundamental score of 2.03. While the recent dividend events provide a bullish lift, the technical picture remains unclear. Given the internal diagnostic score of 4.92 for technical analysis, we recommend caution and a wait-and-see approach. Investors may want to consider waiting for a pull-back before entering new positions and to closely monitor earnings and broader market movements for clarity.