Amcor: Change of Analyst; Modest Downgrade to Fair Value, but Shares Still Undervalued

We lower our fair value estimate for Amcor by 4% to AUD 17. The driver of the revision to our fair value estimate is our revised sales volume estimates. We have reassessed our view on volumes in the developed market segments of North America, Western Europe, Australia, and New Zealand, and are tapering this back slightly to align with our longer-term population growth expectations. Within developed markets—about 75% of sales—we expect most revenue growth from a mix shift toward premium products and that per capita consumption remains stable over the forecast period. This drives a low-single-digit decline in our midcycle volumes from our prior forecast. We forecast 10-year group sales and EBITDA compound annual growth rates of 2% and 3%, respectively.