Amcor Projects Significant EPS Growth and Free Cash Flow Surge After Berry Acquisition

Amcor forecasts significant financial growth after acquiring Berry Global, aiming for 12%-17% adjusted EPS growth and doubling free cash flow to $1.8-$1.9 billion by FY26. Analysts project a 29.63% upside with an "Outperform" recommendation, while GuruFocus estimates a 93.36% upside from current levels based on its GF Value.

Amcor's acquisition of Berry Global in April 2025 has positioned the company as a global leader in consumer packaging. The $22.5 billion deal has been instrumental in driving operational integration, financial discipline, and margin expansion, despite a challenging macroeconomic environment. As the company enters its second year of integration, it is poised for significant financial growth, with analysts projecting a 29.63% upside and an "Outperform" recommendation [1].

Financial Performance and Synergy Realization

Amcor reported fiscal fourth quarter 2025 results, highlighting the completed acquisition and new synergy targets. The company guided for adjusted EPS of $0.80 to $0.83 in fiscal 2026, representing 12% to 17% year-over-year growth, and expects free cash flow to double to $1.8 billion to $1.9 billion [2]. These projections reflect the company's ability to navigate weak volume trends through disciplined execution and synergy realization.

Operational Integration and Cost Savings

Amcor has made significant strides in aligning Berry Global's operations with its own. By the 100-day integration milestone, the company had already closed one site, approved four additional closures, and reduced headcount by over 200 in general and administrative roles. These actions have unlocked $240 million in cost-related synergies for fiscal 2026, with procurement consolidation and production reallocation driving further savings [1].

Financial Discipline and Margin Expansion

Amcor's post-acquisition financial strategy has prioritized deleveraging while maintaining investment in high-growth areas. As of Q4 2025, the company's net leverage ratio stood at 3.5x, with a clear path to reduce it to 3.1x–3.2x within 12 months. This is being achieved through free cash flow generation, which is projected to double to $1.8–$1.9 billion in fiscal 2026, excluding integration costs [1].

Despite a 1.7% year-over-year decline in combined volumes in Q4 2025, Amcor's adjusted EBITDA surged 43% to $789 million through margin expansion and $20M+ savings in restructured beverage operations [1]. The company's strategic portfolio optimization further strengthens its margin profile by focusing on a $20 billion core portfolio in high-growth sectors.

Portfolio Review and Operational Risks

Amcor has identified approximately $2.5 billion in annual sales, including the $1.5 billion North American Beverage business, as non-core due to subscale positioning, cyclicality, or unattractive market dynamics. Ten additional businesses are under review for potential divestment, partnership, or restructuring, with progress on smaller assets expected in fiscal 2026 [2]. This portfolio streamlining could improve the company's organic growth and margin profile by reallocating resources to higher-barrier, innovation-driven segments.

Conclusion

Amcor's post-Berry Global acquisition strategy is a model for strategic integration, demonstrating a clear ability to navigate macroeconomic headwinds through disciplined execution. The company's fiscal 2026 guidance reflects confidence in its synergy roadmap, with analysts projecting a significant upside. However, risks remain, particularly in the North American Beverage segment, where operational headwinds may limit near-term EPS upside. Nevertheless, Amcor's focus on cost discipline and operational efficiency provides a buffer against these uncertainties.

References:
1. [1] https://www.ainvest.com/news/amcor-post-berry-acquisition-strategy-navigating-weak-volumes-financial-discipline-synergy-driven-margin-expansion-2508/
2. [2] https://www.theglobeandmail.com/investing/markets/markets-news/Motley%20Fool/34158981/amcor-sees-12-eps-growth-ahead/