The Future Of Ardagh Metal Packaging: Balancing Expansion Initiatives With Customer Concentration And Demand Trends

Truist Securities analyst Michael Roxland initiated coverage on Ardagh Metal Packaging SA AMBP at a Hold rating with a price target of $4.
The analyst is bullish on AMBP's position as the only public pure-play beverage can producer and its growing exposure to higher-margin speciality mix business.
Roxland sees growth opportunities for the company given its improving execution, and promising beverage can supply/demand dynamics.
However, the analyst sees a comparatively concentrated customer base, challenging dividend coverage and declining hard seltzer demand as a matter of concern.
Also, Roxland believes AMBP's aggressive expansion initiative in Europe and North America has led to project rephasing and weaker fixed cost absorption driving leverage, which can act as a headwind.
The analyst expects EPS of $0.25 (consensus: $0.26) for 2023, revenues of $5.15 billion and EPS of $0.30 (consensus: $0.34) for 2024.
Price Action: AMBP shares are trading lower by 2.37% at $3.51 on last check Tuesday.

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