Amcor’s Volumes Test Negative Again For Coronavirus in Q1 2021; Bemis Synergies Pleasingly on Track

Narrow-moat Amcor is off to a good start in early fiscal 2021, delivering robust first-quarter volume growth unimpacted by a global macroeconomic backdrop that has been materially weakened by the ongoing coronavirus pandemic. Unabating demand for Amcor’s plastic packaging amid the pandemic is unsurprising given consumer staples categories—which demand for Amcor’s plastic packaging largely stems from--benefit from inelastic demand through the economic cycle. Therefore, investors remain focussed on the potential for EBIT margin expansion with the capture of Bemis acquisition synergies ongoing. On this front, our long-term expectations remain unchanged. We continue to expect synergy delivery combined with modest operating leverage to drive EBIT margins toward 15% at midcycle, providing for a 10-year EBIT CAGR of approximately 6%.