Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Why Citi just downgraded Amcor from Buy to Neutral

We look at why Citi downgraded the packaging company from Buy to Neutral.

Why Citi just downgraded Amcor from Buy to Neutral Source: Bloomberg

The market remains lukewarm on Amcor

If one thing: Amcor (ASX: AMC) has proven to be a stable investment over the last year. In that period that stock is down around just 1% -- opening Thursday’s session at $15.04 per share. Like many equities during 2020, Amcor saw its share price crash in March. At its 52-week low, AMC traded at just $9.87 per share.

Despite that volatile price action, Amcor reported a strong bump in earnings as part of its latest quarterly report while also upping its outlook for fiscal 2021.

Looking at that quarterly update in more depth, for the three months ending September 30, Amcor revealed earnings (EBIT) of USD$358 million, up 9%; while also reporting a sharp rise in GAAP earnings per share of USD 12.6 cents, representing a 207% increase.

On the top-line, Amcor's net sales dipped 1%, coming in at USD$3,097 million for the three months ending September 30.

While Amcor’s stock continues to trade flat, during the quarterly update, the company signalled its commitment to boosting shareholder returns: Noting that its quarterly dividend had risen to 11.75 cents per share

Elsewhere, Amcor noted that its quarterly dividend had risen to USD 11.75 cents per share while also announcing a buyback program valued at $150 million.

Commenting on those results AMC's CEO, Ron Delia noted that:

‘Amcor's 2021 fiscal year is off to a strong start with outstanding first quarter financial results ahead of our expectations. Demand for our products remains resilient and our teams continue to stay focused and to deliver excellent operational performance.’

The company further said it now expected earnings per share growth of around 7-12% for FY21 – above the previously expected growth range of between 5-10%.

‘Assuming current exchange rates prevail for the remainder of the year, it is estimated that currency would have no material impact on reported EPS,’ the company added.

Citi’s take

Despite those results, analysts from Citi this week downgraded Amcor from Buy to Neutral, while also modestly lowering their price target to AUD$$16.80 – citing the recent positive share price movements as driving ‘less upside to our target price’.

Despite being impressed by Amcor’s dividend yield and the flexibility of the company’s balance sheet, Citi analysts nonetheless said:

‘Our move to the sidelines further reflects a preference for Packagers with more cyclical exposure in 2021 (~96% of Amcor sales to food & bev and other consumer markets, with limited industrial exposure).’

Want to take a position in Amcor – long or short?

Create an IG trading account or log in to your existing account to get started now.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.