Breaking Down Amcor plc (AMCR) Financial Health: Key Insights for Investors

You're looking at Amcor plc and asking the right question: did the transformative Berry Global acquisition, which closed in April 2025, actually deliver on the promise of scale or just add complexity? The direct takeaway is that scale arrived, but profitability took a hit. Fiscal Year 2025 saw Net Sales surge to nearly $15.0 billion, a 10.0% jump over the previous year, largely fueled by the deal, but the GAAP Net Income attributable to Amcor plc dropped 30% to $511.0 million, reflecting the integration costs and amortization of acquired inventory. That's a significant delta, so you need to understand the moving parts-especially since management is still guiding for a strong Adjusted Free Cash Flow (a better measure of their core operating health) of $900 million to $1.0 billion. Honestly, the market is defintely focused on whether the combined entity can manage its high debt load (a 126.9% debt-to-equity ratio is high) while capitalizing on the major opportunity in sustainable packaging, where Amcor already has recycle-ready solutions for 96% of its flexible portfolio. The numbers are mixed, but they point to a company in transition, not crisis.

Revenue Analysis

You're looking at Amcor plc (AMCR) because you want to know where the money is actually coming from, and honestly, that's the only place to start. The big takeaway for the fiscal year ending June 30, 2025 (FY2025) is that Amcor delivered annual revenue of approximately $15.01 billion, marking a solid 10.04% increase over the prior year.

The revenue story for Amcor is fundamentally split into two core product lines: flexible and rigid packaging. The bulk of the company's sales-about 72.4%-still comes from the Global Flexible Packaging Solutions segment, which brought in $10.87 billion in FY2025. This includes films, foils, and pouches used for food, medical, and personal care products. The remaining 27.6%, or $4.14 billion, was generated by Rigid Packaging, primarily plastic bottles and containers.

Here's the quick math on the segment contribution, which shows how dependent the company remains on its flexible business, but also how the rigid side is growing in importance:

• Global Flexible Packaging Solutions: $10.87 billion
• Rigid Packaging Revenue: $4.14 billion

The geographical breakdown also shows a clear concentration in North America, but the global footprint is defintely a strength. North America was the largest contributor, generating $7.19 billion in revenue for FY2025. Europe followed with $4.32 billion. The other regions, Latin America and Asia Pacific, each contributed roughly $1.7 billion to $1.8 billion.

The most significant change to the revenue stream in the near-term is the acquisition of Berry Global Group, Inc., which closed in April 2025. This deal is a game-changer. The immediate impact was a massive revenue beat in the fourth quarter of FY2025, with sales jumping 44% year-over-year to $5.08 billion, largely due to Berry Global's contribution. This strategic move significantly expanded Amcor's market presence, especially bolstering the Rigid Packaging segment, making Amcor less dependent on just the flexible side. It's a clear move to diversify and strengthen their market moat. You can see how this aligns with the company's long-term strategy in their Mission Statement, Vision, & Core Values of Amcor plc (AMCR).

Profitability Metrics

You're looking at Amcor plc (AMCR) because you want to know if their profitability can withstand the current economic pressures, especially after a major acquisition. The direct takeaway is that while the top-line revenue grew to $15.009 billion in fiscal year 2025 (FY2025), the net profit margin was significantly squeezed by one-time merger costs, resulting in a lower-than-average net margin for the packaging sector.

Gross, Operating, and Net Margins

Amcor's core profitability remains solid at the gross level, but the operational efficiency took a clear hit from the Berry Global acquisition. This is a classic post-merger reality: you buy growth, but you also buy integration costs. For FY2025, the company reported a Gross Profit of $2.834 billion. Here's the quick math on the key margins:

• Gross Profit Margin: 18.9%
• Operating Profit (EBIT) Margin: 6.7%
• Net Profit Margin: 3.4%

That 3.4% Net Profit Margin is the number that should give you pause, but it's defintely not a sign of a failing business; it's a sign of a business in transition.

Profitability Trends and Operational Efficiency

The trend in Amcor's profitability from FY2024 to FY2025 shows a clear divergence between revenue growth and bottom-line earnings. Net sales increased by 5% in FY2025 compared to FY2024, largely driven by the acquisition, but the margins tell a more complex story. The Gross Profit Margin actually dropped from 19.9% in FY2024 to 18.9% in FY2025.

This margin compression wasn't due to poor cost management in the traditional sense, but rather a $133 million inventory step-up amortization related to the Berry Global merger. Also, operating income suffered a significant decline, falling from $1.214 billion in FY2024 to $1.009 billion in FY2025. The primary drivers of this drop in operational efficiency were the merger-related expenses:

• Restructuring, transaction, and integration expenses: $210 million increase
• Higher selling, general, and administrative (SG&A) expenses: $112 million increase

What this estimate hides is the expected long-term synergy benefits from the merger, which should eventually reverse these short-term integration costs. For more on the strategic rationale, you can check out the Mission Statement, Vision, & Core Values of Amcor plc (AMCR).

Industry Comparison: A Relative View

When you compare Amcor plc's profitability ratios against its peer group in the packaging industry, you see that its Gross Margin is competitive, but its Operating and Net Margins lag the industry averages, reflecting the high merger costs.

Amcor's 18.9% Gross Margin is below the reported industry average of 24.85%, but sits comfortably among peers like Silgan Holdings Inc. (17.9%) and is not far from Ball Corporation (20.2%). The real gap is in the Operating Margin: 6.7% for Amcor versus the 9.05% industry average. This confirms that the operational drag is not at the factory floor (Cost of Goods Sold), but in the corporate and integration expenses (SG&A, restructuring). Your action here is to watch for management's progress on synergy realization in FY2026. Finance: project Q1 2026 operating margin without one-time costs by Friday.

Debt vs. Equity Structure

You're looking at Amcor plc (AMCR) and wondering if they're financing growth smartly or just piling on risk. The short answer is they've taken on significant debt to fund a major strategic move, but their investment-grade credit rating suggests the market believes they can manage it. It's a classic balancing act between cheap debt and shareholder dilution.

As of September 2025, Amcor plc's total debt sits around $15.01 billion. This is a substantial figure, and the split shows a heavy reliance on long-term financing, which is typical for a capital-intensive manufacturer. For the fiscal year ending June 30, 2025, the long-term debt was approximately $13.841 billion, with short-term debt and the current portion of long-term debt at about $2.004 billion as of September 2025.

Here's the quick math on their leverage: Amcor plc's Debt-to-Equity (D/E) ratio was 1.26 (or 126%) as of September 2025. To be fair, the average D/E ratio for the Paper & Plastic Packaging Products & Materials industry is a bit lower, sitting around 1.083. Amcor plc is running with a higher level of financial leverage than the industry benchmark, but honestly, for a company of its scale, this isn't defintely a red flag on its own.

The spike in debt during the 2025 fiscal year was largely strategic, not a sign of operational distress. The increase in interest expense and debt was primarily driven by the Merger with Berry Global Group, Inc., which involved both new debt issuance and the assumption of existing debt. This is how they're balancing the books: using debt to fund large, transformative acquisitions that are expected to generate long-term synergies and cash flow, plus they also issued new shares related to the merger.

The company maintains a solid, investment-grade credit profile, which is crucial for managing this debt load. Their credit ratings reflect this stability:

• Standard & Poor's: BBB/Stable/A-2
• Moody's: Baa2/Stable/P-2
• Fitch: BBB+

These ratings mean major credit agencies view Amcor plc as having adequate capacity to meet its financial commitments, even with the higher debt from the acquisition. Management is focused on deleveraging, targeting a Net Debt/Adjusted EBITDA leverage ratio of 3.0x or lower by the end of fiscal 2025. This shows a clear action plan to bring the debt back into a more conservative range, prioritizing debt reduction over further large-scale equity funding right now.

The balance is clear: use debt for high-impact growth, then use operating cash flow to pay it down. If you want to dive deeper into who is buying their stock amid this debt-fueled growth, check out Exploring Amcor plc (AMCR) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking for a clear-eyed view of whether Amcor plc (AMCR) can comfortably meet its short-term obligations, and honestly, the picture is mixed. The company has adequate liquidity to cover immediate debts, but its reliance on inventory is a key point to watch. This isn't a crisis, but it's defintely a constraint on financial flexibility.

The core of this analysis rests on two key ratios: the Current Ratio and the Quick Ratio (Acid-Test Ratio). For the fiscal year ending June 2025, Amcor plc's Current Ratio stood at a respectable 1.21. This means the company holds $1.21 in current assets for every dollar of current liabilities, suggesting good short-term financial strength. However, this ratio is lower than the industry median, ranking worse than 74.69% of its peers in the Packaging & Containers industry.

The Quick Ratio, which strips out inventory-the least liquid current asset-tells a more cautious story. Amcor plc's Quick Ratio was only 0.71. This figure is below the typical 1.0 benchmark, indicating that without selling inventory, the company's cash and receivables alone cannot cover all its short-term liabilities. The Quick Ratio is the real acid test; a sub-1.0 result means you're relying on turning that inventory into cash quickly. That's a structural issue in a capital-intensive business like packaging.

Here's a quick look at the liquidity positions as of FY2025:

• Current Ratio: 1.21 (Adequate, but below industry median).
• Quick Ratio: 0.71 (Suggests reliance on inventory conversion).

Working capital trends also reflect the complexity of the business. In fiscal year 2025, the Net Working Capital Change decreased. This was primarily driven by a $1.44 billion increase in Inventory and an equivalent $1.44 billion increase in Other Current Liabilities. An inventory build-up can tie up cash, but if the increase in liabilities is due to better terms with suppliers, it can be a source of financing. Still, the net effect is a less liquid balance sheet.

Looking at the Cash Flow Statement offers the most actionable insight. For FY2025, Amcor plc generated $1.39 billion in Operating Cash Flow (OCF), which was a 5.22% increase year-over-year. This is the lifeblood of the company, and the growth is a clear strength. Management guided for an Adjusted Free Cash Flow (FCF) of between $900 million and $1,000 million for FY2025, which is solid cash generation.

The Investing and Financing sections of the cash flow statement highlight where that cash is going, and it's a big-ticket item. Capital Expenditures (CapEx) were -$580 million in FY2025, which is necessary to maintain and upgrade production facilities. More notably, the company spent -$1.653 billion on Cash Acquisitions, largely related to the Berry Global Group, Inc. deal. This strategic move is a long-term play, but it puts a temporary strain on cash. The financing side shows a commitment to shareholders, with the annual dividend increasing to $0.52 per share. However, the dividend payout ratio is very high at 152.94%, meaning the dividend is currently being financed by more than just net income.

Here's the quick math on the cash flow components (in millions USD for FY2025):

The potential liquidity concern is the high leverage, with a debt-to-equity ratio of 1.28. The Berry Global acquisition increased the debt load, but management is focused on deleveraging, with a target of 3.0x leverage by June 30, 2025. The strength is the consistent and growing OCF, which provides the capacity to service that debt and fund the dividend, even with a high payout ratio. For a deeper dive into who is investing in Amcor plc and why, consider Exploring Amcor plc (AMCR) Investor Profile: Who's Buying and Why?

Valuation Analysis

Amcor plc (AMCR) appears to be trading at a discount compared to its historical averages and peers, suggesting it is currently undervalued by the market, especially when factoring in its forward growth projections and substantial dividend yield. You are looking at a company with strong assets but a high earnings multiple, so the story is nuanced.

As of mid-November 2025, the stock is trading near $8.48, which is closer to its 52-week low of $7.66 than its high of $10.70. This recent price action signals investor caution, but also presents a potential entry point if you believe the company's turnaround is on track. That's a classic value trap or a true bargain; you need to check the fundamentals.

Is Amcor plc (AMCR) Overvalued or Undervalued?

The core valuation ratios for Amcor plc (AMCR) from the 2025 fiscal year paint a mixed picture, which is common in a defensive industry like packaging. The Price-to-Earnings (P/E) ratio is exceptionally high, but other metrics suggest a more attractive valuation when you look past the recent earnings dip. Here's the quick math on the key multiples:

• Price-to-Earnings (P/E): The FY 2025 P/E ratio stands at 41.16. This is high, and it suggests the market expects a significant rebound in earnings per share (EPS) to justify the current stock price, or that 2025 earnings were temporarily depressed.
• Price-to-Book (P/B): The P/B ratio is a modest 1.79 for FY 2025. This metric is a solid indicator, suggesting you are paying less than twice the company's net asset value, which is often a sign of undervaluation in a capital-intensive business.
• Enterprise Value-to-EBITDA (EV/EBITDA): The FY 2025 EV/EBITDA is 13.88x. Enterprise Value (EV) accounts for debt and cash, giving a truer sense of the company's total value. This multiple is elevated compared to some peers, but it's not wildly out of line for a stable, global leader.

The high P/E is the elephant in the room, but honestly, the P/B and EV/EBITDA ratios suggest a solid, if not cheap, asset base. You should defintely look at the forward P/E, which is often much lower, reflecting expected earnings growth.

Dividend Strength and Analyst Outlook

For income-focused investors, the dividend is a major draw. Amcor plc (AMCR) offers a compelling dividend yield of approximately 6.1%, based on an annualized dividend of $0.52 per share. However, you must look at the sustainability of this payment. The dividend payout ratio is currently very high at 152.94%. What this estimate hides is that the company is paying out more in dividends than it is earning in net income, which is a clear risk to the dividend's long-term safety unless earnings improve soon.

Wall Street analysts have largely maintained a positive stance. The consensus rating from fourteen brokerages is a Moderate Buy. The average 1-year price target is between $10.40 and $10.84. This suggests a potential upside of over 22% from the current price of around $8.48, which is a strong signal that the smart money sees the stock as undervalued. For a deeper dive into the company's long-term strategy, you can review the Mission Statement, Vision, & Core Values of Amcor plc (AMCR).

Your action here is clear: monitor the next few earnings reports closely. If earnings start to climb back toward historical norms, the high P/E will quickly normalize, and the stock will likely move toward the analyst price target. If they don't, the dividend is at risk, and the stock will remain range-bound.

Risk Factors

You're looking at Amcor plc (AMCR) and seeing a global packaging leader, but a seasoned analyst knows to map the risks, especially following a major acquisition. The direct takeaway is this: Amcor's near-term outlook is dominated by two forces-the execution risk of integrating Berry Global and the financial risk of its elevated debt load. You need to watch the synergy delivery like a hawk.

Operational and Integration Headwinds

The transformational acquisition of Berry Global, which closed in April 2025, is the single largest operational risk right now. While the deal is intended to create a stronger, more diversified company, large-scale mergers always carry integration risk. Management is targeting substantial cost synergies of $650 million by the end of fiscal year 2028, a huge number. But missing these targets would directly impact earnings and investor confidence. For fiscal year 2026, they are already factoring in approximately $220 million in net cash integration and transaction costs, which will be a drag on free cash flow.

Also, the company is still battling soft consumer demand in key regions. Overall volumes for the combined business were down an estimated 1.7% in the fourth quarter of fiscal 2025 compared to the prior year. The North America beverage business remains a particular weak spot, and volumes in high-value healthcare categories have also been soft. This volume pressure is a clear sign that macroeconomic conditions are still challenging the top line.

Financial Leverage and Market Conditions

The financial risk is all about leverage. The Berry Global deal pushed Amcor's net debt up to a significant $13.3 billion as of the end of fiscal 2025. This high leverage is a concern, especially in a rising interest rate environment, and it's reflected in a total debt-to-equity ratio close to 2. Here's the quick math: higher debt means more cash flow goes to interest payments, not growth or share buybacks. The company's gross profit as a percentage of sales also decreased to 18.9% in FY2025, driven partly by the amortization of the merger-related inventory step-up, indicating margin pressure is real.

Other financial and external risks include:

• Raw Material Volatility: Amcor's margins are constantly exposed to price fluctuations in polymer resins and other raw materials, which they must pass through to customers.
• Foreign Exchange Risk: Operating globally means currency movements can hit the bottom line. For instance, highly inflationary accounting in Argentina resulted in a negative impact of $16 million in foreign currency transaction losses in FY2025.
• Goodwill Impairment: The balance sheet now holds $18.7 billion in goodwill and intangibles. If the acquired assets fail to perform, a non-cash write-down (impairment) could severely impact statutory net income, as seen with the GAAP net loss of $39 million in Q4 2025.

Regulatory and ESG Scrutiny

The regulatory landscape is shifting fast, particularly around Environmental, Social, and Governance (ESG) matters. Amcor faces increasing scrutiny and changing expectations from investors and governments regarding its ESG practices, especially plastic waste. New regulations, like those in California and the EU, demand more sustainable packaging, which requires significant capital investment in new materials and recycling infrastructure. This is a long-term, non-negotiable cost of doing business.

Mitigation Strategies and Investor Focus

Management is defintely aware of these risks and has clear mitigation strategies. They are focused on disciplined integration to capture the $260 million in pre-tax synergy benefits planned for fiscal 2026. On the liquidity front, they maintain strong central management, with $2.05 billion in unused capacity remaining under committed bank syndicated loan facilities as of June 30, 2025. This flexibility is crucial for managing the debt load. For more on who is buying into this strategy, check out Exploring Amcor plc (AMCR) Investor Profile: Who's Buying and Why?

Your next step: Finance should track the quarterly realization of synergy savings against the $260 million target and monitor the net debt-to-EBITDA ratio for signs of deleveraging progress.

Growth Opportunities

You're looking past the current quarter's noise, and honestly, that's the right move for a company like Amcor plc (AMCR). The direct takeaway is this: the massive Berry Global acquisition, completed in April 2025, fundamentally reshaped the company's growth trajectory, shifting the focus from slow organic growth to large-scale synergy realization and market dominance. This is a game-changer, not a bolt-on deal.

In the recently closed Fiscal Year 2025 (FY25), Amcor plc reported net sales of $15,009 million, an 11% increase, largely due to the acquisition. While the full-year adjusted EPS of 71 cents slightly missed the lower end of the reaffirmed guidance of 72 to 76 cents per share, the real story is the platform built for 2026 and beyond. The combination with Berry Global is expected to drive stronger, more consistent volume-driven organic growth by broadening the primary packaging portfolio across consumer goods and healthcare.

The Berry Global Catalyst and Future Earnings

The integration of Berry Global is the single biggest driver of near-term growth. Management is confident this will lead to a significant boost in the bottom line. Analysts project Fiscal 2026 revenue to hit $22.36 billion, a substantial jump from the FY25 net sales. Here's the quick math on what that means for your returns: the company anticipates Fiscal 2026 adjusted EPS to land between $0.80 and $0.83, representing a projected growth of 12-17% over the FY25 result. That's a strong signal. Also, the expected free cash flow for Fiscal 2026 is robust, projected at $1.85 billion at the midpoint, which is crucial for debt reduction and continued dividends.

This combined entity enhances Amcor plc's competitive moat (a sustainable competitive advantage) by giving it a broader, more diversified product mix, particularly in rigid packaging solutions. The scale is now immense, making it defintely harder for smaller players to compete on cost and global reach.

Innovation and Sustainability as a Core Advantage

Beyond the acquisition, Amcor plc is leaning hard into its innovation and sustainability leadership, which acts as a powerful, long-term growth engine. The company invests $180 million annually in R&D, supporting a network of 10 innovation centers. This focus is translating directly into product-market fit in a world demanding eco-friendly packaging.

In FY25, Amcor plc met its commitment to use 10% post-consumer recycled (PCR) plastic in its products. More impressively, it developed recycle-ready options for an impressive 96% of its flexible packaging portfolio, positioning it as a leader in a rapidly growing market. They are actively pushing the boundary with new materials and formats.

• Expanded AmFiber paper-based packaging range.
• Launched AmSky recycle-ready blister packs for pharmaceuticals.
• Extended the Lift-Off initiative to partner with startups on compostable solutions.

This commitment to being a sustainability leader is a key competitive advantage that will drive market share gains as consumer packaged goods companies (CPGs) scramble to meet their own environmental goals. If you want to understand the foundational values driving these decisions, you should review the Mission Statement, Vision, & Core Values of Amcor plc (AMCR).