Ardagh Metal Packaging (AMBP), mcap=$4.1bn, price $6.76 vs $5.90

$AMBP pitch:
– Aluminium beverage can packaging company.
– No.3 global player behind $BALL and $CCK.
– 7% dividend yield and buyback for 22% of the float.
– Cheap at 8.6x ’22 and 6.8x ’23 EBITDA.
– Trades at 3-4x turn discount to peers.
– Best growth prospects among peers with EBITDA projected to double by ’24.
– Pre-sold and fully funded capacity expansion nearing completion.
– High revenue/EBITDA growth visibility from fully contracted 2022-2024, with further expansion plans beyond that.
– 75% owned by parents.
– Non-cyclical defensive staple with high FCF.
– The oligopolistic industry is exposed to ESG tailwinds as aluminum cans are infinitely recyclable.
– Contractual commodity input cost inflation pass-throughs, however, are reassessed annually.
– Under the radar / disliked as came public via SPAC and near term worries on cost pass through, especially energy.

Valuation:
– By the end of 2023 projected to complete capacity expansion and have >$1bn in EBITDA.
– A 10x multiple (still below peers) gives an $11.3/share target.

Exp. gain: +92% to $11.3/share by end of 2023.

Full $AMBP write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/ARDAGH_METAL_PACKAGING_SA/2520889580

Published on: August 1, 2022  •  Published by:
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