Jefferies reiterates Buy rating on Amcor stock, citing 10% FCF yield

Amcor Plc (AMCR) recently reported mixed Q4 2025 results, missing both EPS and revenue forecasts, which has contributed to its stock trading near a 52-week low. Despite this, Jefferies reaffirmed its Buy rating with an $11.67 price target, citing the packaging company's resilience in core categories, potential for margin and volume improvements from non-core asset divestments, a 10% free cash flow yield, and a substantial 6.23% dividend yield, suggesting the stock may be oversold and undervalued.

Analysis

Amcor Plc. (AMCR) presents a mixed but potentially opportunistic profile for investors. The company recently reported disappointing fourth-quarter 2025 results, with an EPS of $0.20 missing the $0.21 forecast and revenue of $5.08 billion falling short of the expected $5.18 billion. This performance, attributed to weaker volumes in North America, has contributed to the stock trading near its 52-week low of $8.16. However, Jefferies has reaffirmed a 'Buy' rating with a price target of $11.67, suggesting significant upside from the current $8.24 price. The bullish thesis is supported by several factors: resilience in core business categories which grew in the low single digits, strong trailing twelve-month revenue growth of 10.04%, and attractive valuation metrics including a 6.23% dividend yield and a 10% free cash flow yield. Furthermore, a key potential catalyst is the ongoing divestment of non-core assets, which Jefferies estimates could improve both volumes and margins by 100 basis points, suggesting the stock may be oversold.

Key Decisions for Investors

• Value and income-focused investors should consider the stock's current valuation near its 52-week low, supported by a substantial 6.23% dividend yield and a 10% free cash flow yield.
• The primary catalyst to monitor is the company's execution on divesting non-core assets, as the projected 100 basis point improvement to margins and volumes is central to the bull case.
• Despite the analyst's optimism, caution is warranted due to the recent earnings miss and volume weakness in North America, making it critical to watch for signs of operational stabilization in upcoming quarters.