AMC’s (the big packaging company) CEO is retiring, citing health and “the grind” as he exits after 9 years in the job.

Fair enough, by mid Wednesday many can feel that way. The worry for Amcor, of course, is that it’s coming after a years’ worth of weak revenue and earnings trends, driven by destocking across the customer base.

Does it herald anything more? I’ve written exactly those words before, in different circumstances, and it turned out to presage further weakness. Equally, many times, these things come and go and nothing bad eventuates.

In this case, Amcor have reiterated their guidance, which is good; mind you, the result was only last month, so you’d hope the earnings outlook hadn’t fallen apart 4 short weeks later.

In any case, I think we know where we stand with Amcor. It’s a Quality Defensive that’s been anything but, a Steady Stable Grower that’s been anything but, and hence the de-rate in the share price and the earnings multiple. Quality growers that disappoint trade down hard when they miss, and hence Amcor trades ~12x.

Since the destocking cycle has been longer and more protracted than many (including and especially us) expected, I’m not too concerned about what this might mean for earnings weakness. Amcor will survive to the other side, and things will return to normal, and both the yield and valuation provide the necessary support (bridge) to get through it.

9 years in the job is probably long enough, hard enough, and the recent few years tough enough to warrant fresh eyes, new hands, and hence we can get behind the outcome.

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