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Amcor (AMCR) Reaffirms FY24 Guidance Amid CEO Transition

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Amcor Plc (AMCR - Free Report) reaffirmed its guidance for fiscal 2024 and announced its CEO transition.

For the fiscal year ending on Jun 30, 2024, the company expects its adjusted EPS to be 67-71 cents. The mid-point of the guidance indicates a year-over-year decline of 3%.

Amcor projects share repurchases to improve earnings by around 2%. Currency translation is expected to have positive impacts of 2%, assuming current rates prevail through the remainder of fiscal 2024. However, higher expected net interest and tax expenses are expected to have a negative impact of 6%. The results will also reflect negative impacts of 3% related to the sale of the AMCR's Russia business on Dec 23, 2022.

The company projects an adjusted free cash flow of $850-$950 million for fiscal 2024, indicating growth from the $848 million reported in fiscal 2023. About $70 million will be committed to share repurchases as part of the previously announced share repurchases program  in fiscal 2023.

In comparable constant-currency terms, Amcor anticipates third-quarter fiscal 2024 adjusted EPS to decline in a mid-single-digit percentage from that reported in the third quarter of fiscal 2023. The adjusted EPS for the fiscal fourth quarter is expected to be up by a mid-single-digit percentage  from that reported in the prior-year quarter.

The company additionally announced that Ron Delia informed the board of directors of his plan to retire after nine years as CEO, effective Apr 15, 2024. The board elected Amcor's current chief commercial officer and a long-time member of the Global Management Team, Peter Konieczny, as interim CEO.

To aid the transition, Delia will continue to give advising support until Sep 30, 2024. The board is initiating a thorough search to find a permanent replacement for the CEO position, which will include internal and external applicants.

The company reported second-quarter fiscal 2024 adjusted EPS of 16 cents, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line fell 15% from the year-ago quarter mainly due to the downtrend in volumes, reflecting customer destocking.

Total revenues fell 11% year over year to $3.25 billion in the reported quarter. The price/mix had benefits of around 1% on sales. The volume was down 9% from the year-ago quarter. A 2% favorable impact of movements in foreign exchange rates was offset by a 2% unfavorable impact of items affecting comparability and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.29 billion.

Price Performance

In the past year, AMCR shares have lost 9.4% against the industry’s 11.2% growth.


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Zacks Rank & Stocks to Consider

Amcor currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , Applied Industrial Technologies (AIT - Free Report) and Proto Labs, Inc. (PRLB - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), and AIT and PRLB carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Cadre Holdings’ 2024 EPS is pegged at $1.15. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days, suggesting year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 72% in the past year.

Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 EPS is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 43.3% in the past year.

The Zacks Consensus Estimate for Proto Labs’ 2024 EPS is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days, implying year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.

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