The Commonwealth Bank has upgraded its recommendation on packaging giant Amcor to buy from hold, with the stock having underperformed the market by 9 per cent in the last month.
The bank believes the underperformance is unjustified and considers Amcor to have relative earnings certainty and an attractive valuation.
CBA believes earnings certainty in the 2013 financial year will be assisted by raw material cost weakness, the current US heatwave, a weak Australian dollar and falling aluminium and resin prices.
Amcor recently purchased one of the largest independently owned packaging services in Australia, Wayne Richardson Sales, and in so doing has added some 2,700 new customers to its list.
