Stock Analysis | Amcor Outlook - A Mixed Bag for Packaging Giants

Market Snapshot

Takeaway: The technical outlook for Amcor (AMCR) is weak, with bearish signals dominating. Despite positive money flows, the recent price trend shows a drop of -2.85%, suggesting caution for new investors.

News Highlights

Recent headlines highlight the growing focus on sustainable packaging and legal disputes among major players in the industry:

• EPE USA is pushing forward with sustainable packaging innovations, developing reusable and recyclable materials to meet consumer demand for eco-friendly solutions.
• Mondelez International, the parent company of Oreo, filed a lawsuit against Aldi for allegedly copying its cookie and cracker packaging, a move that could impact brand identity and consumer perception in the snacks market.
• The Public Employees Retirement System of Ohio reduced its stake in Packaging Co. of America (PKG), signaling potential concerns about market exposure in the sector.

Analyst Views & Fundamentals

The analyst community shows a neutral stance, with a simple average rating of 3.00 and a weighted average rating of 2.08. This suggests a moderate level of caution and uncertainty among analysts.

Rating consistency is low, with no consensus on the stock’s direction. Notably, the current price fall aligns with these expectations, indicating that market sentiment and analyst views are in sync.

On the fundamental side, Amcor’s financials show a mixed performance. Key metrics include:

• Gross profit margin: 19.49% – a solid margin but not exceptional.
• Net profit margin: 5.15% – moderate profitability.
• Return on assets (ROA): 1.03% – indicates weak asset utilization.
• Operating cycle: 119.89 days – longer than ideal for efficient operations.
• Current assets turnover ratio: 1.34 – average efficiency in using current assets.
• Shareholders' equity / Total liabilities: 30.58% – suggests a manageable debt load.

Each of these fundamental factors has been assigned an internal diagnostic score (0-10), based on our proprietary model, which assesses their relative strength and impact on the stock’s performance. While the model overall gives Amcor a fundamental score of 4.67, the individual factor scores vary widely, with Shareholders’ equity / Total liabilities scoring the highest at 3.00 and ROA scoring the lowest at 0.03.

Money-Flow Trends

Big money is flowing into Amcor — the overall inflow ratio is 50.19%, with large and extra-large investors showing a strong positive trend. This suggests institutional confidence in the stock despite the bearish technical indicators.

However, retail investor activity is split, with small investors showing a negative trend. This divergence between large and small investors indicates a mixed sentiment in the market.

The fund-flow score is 7.91, which is considered good, reinforcing the idea that Amcor is attracting significant institutional attention.

Key Technical Signals

Amcor’s technical outlook is clearly bearish, with an internal diagnostic score of 2.0. The key signals to watch include:

• Williams %R Oversold – internal diagnostic score: 2.99. This indicator suggests the stock is in a neutral to weak state, with an average return of -3.00%.
• Marubozu White – internal diagnostic score: 1.00. This bearish pattern has historically delivered an average return of -1.33% and a win rate of just 33.33%.

Over the past five days, Williams %R Oversold has been active on multiple days, with a strong presence on August 21 and August 26. The Marubozu White signal appeared on August 21, adding to the bearish momentum.

Our key insight is that the technical side is weak, and it is suggested to avoid the stock at this time. With 2 bearish indicators and 0 bullish ones, the trend is clearly on the downside.

Conclusion

Amcor’s recent performance shows mixed signals. While institutional investors are showing interest, the technical landscape is bearish, and the price has dropped by 2.85% recently. Given the internal diagnostic score of 2.0 for technical indicators, our recommendation is to consider waiting for a pull-back or a clearer bullish signal before entering the stock. Investors may want to keep a close eye on upcoming earnings reports or key industry developments that could shift the momentum.