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Amcor Shares Unlikely to Secure Sustained Re-rating, Jefferies Says

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Amcor (ASX:AMC) shares have rebounded as cost concerns have eased, but a sustained re-rating is unlikely due to ongoing structural challenges, Jefferies said in a note on Wednesday.

The packaging company is expected to face a structural volume drag of around 1% per year, making it difficult for the company to meet its 2027 market consensus expectations.

Jefferies said Amcor's organic volumes have declined for four consecutive quarters, due to customers shifting towards cheaper store brands, lower food assistance spending that could reduce demand in some product categories, and weight loss drugs impacting demand for certain food categories.

The investment firm expects Amcor to report fiscal fourth-quarter earnings per share of $1.20, in line with analysts' estimates compiled by Visible Alpha.

Jefferies downgraded Amcor's rating to hold from buy and cut its price target to AU$64.17 from AU$70.77.

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