Amcor (AMCR) Q4 FY2026: The Growth Was Bought, Not Earned

Amcor plc (AMCR) Q4 FY2026 — Q4 FY2026 (quarter ended June 30, 2026): net sales $6,398M, up 26% and $344M ahead. Adjusted EPS $1.23 vs a $1.19 bar, up 23%. GAAP EPS $0.83. Adjusted EBIT $836M. FY26 free cash flow $1,303M. Stock -1.77% to $46.56. Amcor beat on both lines and grew adjusted EPS 23%, and the stock opened higher then sold off all session. Its own growth bridge says why: of the 26% rise in sales, 19 points were the Berry acquisition, 6 were raw-material pass-through and 2 were currency, leaving organic sales at MINUS 1% with volume flat. THE CALL: HOLD (3/5, A REAL BEAT WITH NO GROWTH UNDERNEATH IT) — base-case value ~$45.0 vs ~$46.38 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value ~$45.00 vs the $46.38 close, 3% below - we are close to Wall Street on PRICE and far apart on the REASON. Consensus is a Buy at a $48.18 target, under 4% of upside. What holds this share price up is a 5.6% dividend covered just 1.08x by reported cash flow, not growth. We model $4.10 of forward EPS against the Street's $4.59, about 11% lower. - THE GROWTH BRIDGE, FROM AMCOR'S OWN TABLE: net sales +26% is +19 points of acquisitions net of divestitures (~$962M of Berry), +6 points of raw-material pass-through (~$280M, which carries essentially no margin), +2 points of currency, and ORGANIC -1%. Volume was flat, price/mix -1%. For the full year: organic -2%, volume -2%. Two straight years without underlying growth. - SYNERGIES AND CURRENCY WERE WORTH MORE THAN THE GROWTH: Berry synergy in adjusted EBIT ran $33M, $50M, $57M and $100M by quarter - exactly the $240M the full year reports. Taxed at the 16.8% rate Amcor paid, over 463.8M diluted shares, that is $0.43 a share. Currency added ~$0.11 (13% reported EPS growth, 10% constant currency). Actual growth was $0.46, $3.56 to $4.02. - THE GUIDE NOBODY READ: Amcor is moving its year end from June 30 to December 31, so instead of a full year it guided a six-month Transition Period, July-December 2026, at $1.80-$1.90. The same six months a year earlier earned $1.83. That is -1.6% to +3.8%, about +1% at the midpoint - right after a +23% quarter. Berry closed April 30, 2025, so the comparison is clean. - CASH, DIVIDEND AND DEBT: FY26 free cash flow was $1,303M against guidance of $1.8-1.9B in November, cut to $1.5-1.6B in May. The first nine months generated MINUS $93M - the whole year arrived in the June quarter on an $849M working-capital release. Dividends paid were $1,195M, 92% of it. Net debt is $12,897M and leverage is guided HIGHER, to 3.5x-3.6x, by December. What to watch: UP: two consecutive quarters of positive organic volume, which would give the remaining ~$410M of Berry synergies something to compound against. DOWN: a December leverage print above the guided 3.5x-3.6x while the dividend still runs at 92% of free cash flow. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.