AMCR Lost 15% In A Month. Do You Buy Or Wait?
Amcor (AMCR) stock is down 15.4% in 21 trading days. While history suggests price dips recover, there is risk – specific to profitability, balance sheet and downturn resilience. Consider the following data:
- Size: A $17 Bil company with $15 Bil in revenue currently trading at $8.28.
- Fundamentals: Last 12 month revenue growth of 10.0% and operating margin of 8.8%.
- Liquidity: Has Debt to Equity ratio of 0.89 and Cash to Assets ratio of 0.02
- Valuation: Currently trading at P/E multiple of 32.9 and P/EBIT multiple of 16.1
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 83.2% within a year. See AMCR Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for AMCR, see Buy or Sell AMCR Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and AMCR drops another 20-30% to $5.80 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Amcor (AMCR) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: AMCR provides flexible and rigid packaging products globally for food, beverage, medical, pharmaceutical, personal care, and other industries across multiple regions.
2022 Inflation Shock
- AMCR stock fell 37.4% from a high of $13.49 on 6 June 2022 to $8.45 on 23 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $11.44 on 2 September 2024 , and currently trades at $8.28
| AMCR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -37.4% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- AMCR stock fell 46.0% from a high of $11.02 on 5 February 2020 to $5.95 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 August 2020
| AMCR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -46.0% | -33.9% |
| Time to Full Recovery | 147 days | 148 days |
Worried that AMCR could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.