Ardagh Metal Packaging: A Shift In Fortunes, But Don't Get Too Excited Now

The Alpha Sieve4.83K FollowersFollow5ShareSavePlay(11min)CommentsSummaryArdagh Metal Packaging, which has outperformed its Russell 2000 and material peers by 3x and 4x over the past 14 months, is set to report Q4 earnings on the 26th of February.Top-line and EBITDA growth are expected to slow, while seasonal pressures on working capital could cap cash flow generation.Leverage remains elevated at 5.2x net debt/EBITDA, with AMBP's dividends funded by debt and no positive free cash flow coverage.AMBP's forward EBITDA multiple has re-rated to 9x, in line with peers and its own historical average, but AMBP's EBITDA margin lags the sector by over 300 bps.The risk-reward on the charts does not look very appealing now.e-crow/iStock via Getty Images Background Ardagh Metal Packaging S.A. (AMBP) which has long-standing roots in Ireland (although incorporated in Luxembourg), and is a part of the sustainable packaging business group- Ardagh Group S.A. (which owns a 76% stakeThis article was written byThe Alpha Sieve4.83K FollowersFollowInvestment research, primarily oriented towards uncelebrated/under-covered stocks and ETFs, across North America, Latin America, Europe and Asia. Seeks to combine both fundamental and technical disciplines while making an investment/trading proposition.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.