Azzet reports on three stocks with double-digit market-moving updates to share today.
Amcor tumbles after 4Q update disappoints
CHESS Depository Interests in Amcor (ASX: AMC) (NYSE: AMCR) were down over 11% at the open after the plastics packaging large-cap posted a fourth-quarter update that clearly disappointed the market.
At face value, today’s result looks pretty good with fourth-quarter net sales reaching US$5.08 billion (A$7.82 billion), up 43% on a constant currency basis, with adjusted earnings of $611 million, up 34%, following the completion of its all-stock acquisition of Berry Global.
But what clearly rattled investor confidence was the stock’s double-miss on both earnings and sales.
Also weighing on market sentiment were significant integration expenses tied to Amcor’s acquisition of Berry Global.
But despite these concerns, Berry Global has expanded Amcor’s core portfolio to $20 billion in consumer packaging and dispensing solutions and is expected to deliver $650 million in synergies through fiscal 2028.
Then there are operational challenges within its North American beverage segment, with sluggish consumer demand for discretionary items - notably snacks and sweets - impacting volumes across its rigid and flexible packaging lines.
This segment faced operating issues, including limited throughput capacity during the peak seasonal quarter, and weak price/mix trends of -4%, resulting in a $20 million year-over-year negative impact on earnings before interest and taxes.
For the full year, net sales were $15 billion, up 11% on a constant currency basis, while earnings rose 12% to $1.7 billion, and the annual dividend was increased to 51 cents per share.
For fiscal 2026, Amcor expects adjusted EPS of 80 cents to 83 cents, and free cash flow of $1.8 billion to $1.9 billion, with guidance assuming a full year of Berry Global ownership yet excluding potential portfolio optimisation actions.
In response to today’s update, BofA Securities has lowered its price target to $10.00 from $10.30 while maintaining a Buy rating on the packaging company’s stock.
The firm noted that the lack of incrementally positive news on synergies and the gradual approach to strategic review contributed to recent share price weakness.
According to BofA, Amcor plans to stabilise its North American beverage operations over the next two quarters before considering bringing this business to market.
Key numbers announced today:
- Overall volumes are declining 1.7% compared to the expected 0.5% growth.
- Flexible packaging volumes fell 1.5% against expectations of 0.5% growth.
- Margins reached only 14.1% versus the 15.5% estimate.
- Rigid packaging volumes declined 2%.
- North American beverage packaging is experiencing a more significant drop of over 5%.
- Amcor has a market cap of $9.2 billion; the share price is down 16% over one year and down 8.5% in the last month.
The stock’s shares appear to be in a strong near-term rally within a longer-term bearish trend. The 200-day moving average is downward sloping and implies that there has been limited demand for this stock.
Consensus is Moderate Buy.
WA1 Resources tanks after issuing 5.9 million new shares to raise A$100 million
Shares in WA1 Resources (ASX) were down around 14% at noon after the large-cap miner the market it had secured firm commitments for a $100 million placement at $17 per share, a 9.4% discount to the five-day volume-weighted average price.
Proceeds are expected to help fund pre-development and infrastructure work at its Luni Niobium Project located in the West Arunta region of WA, a significant new belt which has historically been underexplored.
The placement will issue around 5.9 million new shares, taking the total on issue to approximately 74.2 million, and this is what led the price to fall today.
When a company issues new shares, it increases the total number of shares outstanding - which reduces the ownership percentage of existing shareholders unless they buy more shares to maintain their stake.
Commenting on today’s update, WA1 managing director Paul Savich told the market that strong demand received for the placement from both existing shareholders and new institutional investors was a vote of confidence in the Luni Niobium Project.
“Following the Placement, the Company will hold approximately A$1681 million in cash, providing balance sheet strength to assist with progressing one of Australia’s most important critical mineral projects,” Savich said.
“These funds will allow us to continue to implement our strategy of committing to critical path and long-lead activities and allow important capital expenditure in relation to various key supporting infrastructure components.”
Luni Niobium Project aside, WA1 Resources' other projects include West Arunta, Madura, and Hidden Valley.
Earlier this month Bell Potter placed a "buy" recommendation and $26.00 price target on the stock on the expectation that Luni deposit (niobium resource) has the potential to become a major global source of niobium and could eventually generate about $485 million in annual earnings.
Global supply for niobium - a critical mineral utilised in the strengthening of steel - is currently concentrated between two Brazilian producers.
Bell Potter expects Luni to be a high-grade, large-scale niobium discovery in a stable jurisdiction (Western Australia), offering an alternate supply source to current routes.
“Our recommendation for WA1 is based on a discounted cash flow valuation from our NDS for the Luni prospect, risked by 30% to take into account the stage of the project,” the broker said.
The company had a cash balance of around $73 million as at 30 June 2025.
WA1 Resources has a market cap of $1.1 billion; the share price is up 23% in one year and down 7% in the last week.
The stock appears to be in a strong bullish trend, confirmed by multiple indicators. Specifically, a 5-day moving average of the stock price is above the 20 and 50-day moving averages.
Consensus is Strong Buy.
The stock is currently trading at $16.70.
Baby Bunting soars on release of FY25 result
Shares in Baby Buntings (ASX: BBN) were up over 30% in early afternoon trading after the maternity and baby goods retailer’s FY25 result included some watershed outcomes.
Sales of $521.9 million hit a new record after rising by 4.7% from the previous year, supported by comparable store sales growth of 4.2%.
While sales were strong across all key categories, soft goods sales were the standout as the company's Store of the Future rollout continues to build momentum, driving a 24% rise in transactions and a 6% increase in basket sizes.
Designed to enhance customer experience and boost sales, the recently launched growth initiative features updated store layouts.
Instead of issuing a dividend for FY25, the retailer plans to use its improved balance sheet to support its ongoing growth strategy.
Baby Buntings' CEO, Mark Teperson attributed today’s result to the group's refreshed value proposition and marketing approach and remains committed to achieving a 10%-plus earnings margin on a pre-AASB 16 basis.
"Our exclusive and private label brands now represent 47.1% of total sales (up 110 bps on FY24), demonstrating the strength of our product innovation and curation strategy,” he said.
“The Store of the Future format provides a clear blueprint for shareholder value creation, and we have a strong pipeline of new store opportunities.”
Teperson expects to see a significant runway for market share growth, particularly in the $3.4 billion soft goods category where the company currently has just around 3% market share.
Other key numbers announced today:
- Gross margin of 40.2% increased by 340 basis points year-on-year, exceeding a previously reported target of 40%.
- Store of the Future refurbishment program delivered a 28% jump in sales across three stores opened in FY25.
- New customer acquisitions grew by 6.2%.
- Total active customers ended FY25 at 828,000 – up by 4.5% on last year.
- Net profit after tax on a pro-forma basis came in at $12.1 million, up 228% on the previous 12 months.
- Net debt at the end of June came in at $4.6 million, down from $13 million at the same time last year.
Outlook
Baby Bunting is targeting up to 12 Store of the Future refurbishments in FY26 and expects to open five new large-format stores and three small-format pilot stores in the first half of FY26.
Based on the success of these pilot stores, a further two or three small-format stores could be on the cards in the fourth quarter of FY26.
The company guided to pro-forma net profit between $17 million and $20 million in FY26, assumes store sales growth of between 4% and 6% for the year, and a gross margin of 41%.
Meanwhile, capex of between $30 and $35 million is expected to be fully funded through operating cash flow.
Back in April, Macquarie Group became a substantial holder in Baby Bunting, with a 16.27% voting power.
This acquisition reflected Macquarie’s strategic interest in expanding its influence and control within the retail sector, potentially impacting its market positioning and offering new opportunities for stakeholders.
Baby Bunting has a market cap of $329 million; the share price is up 70% in one year and up 41% in the last week.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
