We value AMBP at 8x NTM EBITDA, below the bev can assets of its main competitors given AMBP's lesser scale, limited free float, and outsized exposure to hard seltzer, partially offset by superior growth and increasing speciality mix. Our 8.0x multiple brings us to a $4 target price.

If the impact on the company from any of the factors below proves to be greater than we anticipate, the stock will likely have difficulty achieving our target price.

New entrants – We believe further new entrants, specifically in North America, present a meaningful risk to AMBP. Reaching 2025 financial targets will require deal renewals that may be threatened by new market entrants.

Currency – AMBP derives 46% of revenue from Europe. Even if growth meets the company’s forecasts, financials may fall short of the targets if FX drives a material impact. In the Americas, AMBP has exposure to Brazil, which may also drive a sizeable financial impact. AMBP traditionally buys materials and sells finished products within the same country/currency, so the financial impact is almost entirely from translation.

Project execution – AMBP forecasts a +12.5% revenue CAGR from 2020-2024 that will depend on new bev can production at both new and existing factories. Each capacity expansion project carries risk on contract agreements, start-up costs and employee knowledge. Under IFRS, AMBP excludes start-up costs but run-rate earnings power will be watched closely.

New regions – AMBP expects to produce bev cans beyond its current footprint, entering new regions alongside existing customers. This could carry elevated risk as AMBP will have to displace the current producers. We also note that AMBP currently operates in the 3 strongest bev can markets; we expect new markets to be smaller, potentially less accepting of the beverage can and  possibly more crowded.

Consumer preferences – A large portion of growth in beverage cans is contigent upon the success of new product launches such as hard seltzers, tea, coffee, juice and water. If these product launches fail, fall short of expectations, or opt for a different packaging format, AMBP could fall short of its forecasts.