What happened
Shares of packaging specialist Amcor (AMCR 0.79%) were up 7% heading into midday trading on Friday as the markets rebounded from Thursday's rout.
So what
The stock of the maker of rigid and flexible packaging for food, beverage, pharmaceutical, and personal-care products has fallen 16% in the last week after butting up near its 52-week highs. As the economy reopens and business normalizes, product packaging across the broad swaths of the economy Amcor services ought to be in high demand.
Image source: Getty Images.
Now what
Amcor seems range-bound by an $11 per share ceiling that it has had difficulty breaking through over the past year. But unlike other businesses that have refused to provide a forecast for the year due to the pandemic, the packaging leader recently updated its guidance to say it foresees earnings per share rising 11% to 12% this year, with free cash flow topping $1 billion before certain expenses.
It continues to integrate the Bemis acquisition it made last year, which opened up new markets and opportunities for growth. Because of the markets it serves, its business offers a level of stability even through grave economic upheavals such as the pandemic.
Amcor pays a dividend that it has increased for 25 consecutive years, making it a Dividend Aristocrat.
Its valuation may be a little pricey based on certain metrics, but at 13 times next year's earnings estimates, it may be seen as a reasonable value.
