Amcor (ASX:AMC) shares are ‘a terrific defensive position’: expert

Key Points

• Amcor shares down 1.6% for the day, but up marginally for 2022
• The company reported a robust result for the first-half of FY22
• Elston analyst Bruce Williams provided his expert take on Amcor shares

The Amcor PLC (ASX: AMC) share price has continued to gradually travel higher over the past 12 months.

After hitting a low of $14.18 in February 2021, its shares ticked up a notch to reach an all-time high of $17.90 in August.

Since then, Amcor shares have settled back down to $16.58, down 1.6% for the day.

When comparing against its sector, Amcor shares are up 14.66% versus the S&P/ASX 200 Materials (ASX: XMJ), which is up 8.84% in a year.

Notably, following the release of the company results for its FY22 first-half scorecard, Elston’s analyst Bruce Williams weighed in.

What’s driving Amcor share price higher?

Over the six months ending 31 December, Amcor reported a solid first-half performance as it navigated a challenging operating environment.

Across the business, net sales increased by 12% to US$6,927 million on the back of servicing demand in key segments.

At the same time, a broad range of actions were implemented to recover higher input costs and manage through general inflation.

This led to adjusted earnings before interest and tax (EBIT) of US$769 million, up 5% on the prior corresponding period.

In addition, adjusted earnings per share (EPS) rose by 9% to 35.8 US cents.

The board declared a quarterly dividend of 12 US cents to be paid on 15 March 2022.

While the result itself was exceptional given the current surroundings, Amcor reaffirmed its fiscal 2022 outlook.

Management noted that it remains focused on executing its strategy for long-term value creation established over the last several years.

The company is increasing investments in premium segments such as healthcare and protein, in emerging markets to drive growth and margin expansion.

When asked by Ally Selby from Livewire Markets about which ASX share can safely deliver returns in 2022, Mr Williams said:

“The one we’re bringing to the table today is Amcor…

“The basis of its business is consumer staples, so things like healthcare, food, those sorts of things. It’s a packaging business that is dominant in what it does, in each of the markets in which it participates.”

Mr Williams went on talk about the business’ fundamentals, adding:

It generates excellent cash flow. It’s building into its technology around sustainable and recyclable packaging. We think it’s just a terrific defensive position that, through a combination of capital growth, dividends and buybacks, will generate consistent returns for investors for the foreseeable future.

Year to date, the Amcor share price has nudged about 0.36% higher.

The post Amcor (ASX:AMC) shares are ‘a terrific defensive position’: expert appeared first on The Motley Fool Australia.

More reading

• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Energy stocks surge and RBA hoses down the chances of a rate rise. Scott Phillips on Nine’s Late News
• Why Amcor, Ansell, Block, and Credit Corp shares are sinking today
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Amcor (ASX:AMC) share price falls despite reaffirming earnings guidance and US$200m buyback expansion

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/W5EUobF