Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.2 |
| P/S | 10.0 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 15.6x
- ▸PEG: 0.03
AMBP · Why this verdict
Why Ardagh Metal Packaging (AMBP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ardagh Metal Packaging exhibits strong price momentum and exceptional free cash flow relative to reported earnings, but business quality falls below the minimum threshold and the stock sits within 0.5% of its near-term resistance target — leaving an unfavorable risk/reward that makes exiting the position the appropriate course.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company converts cash at roughly 1000% of reported net income, indicating that non-cash charges substantially depress stated earnings while the underlying cash generation engine remains materially stronger than the income statement implies. Quality breakdown | Free cash flow as a percentage of net income remains above 300% over the next four quarters, confirming the cash conversion advantage is structural rather than episodic. | →Stable |
| CounterA 1000% FCF-to-net-income ratio likely reflects timing or non-recurring working capital effects; as net income normalizes upward, the ratio reverts sharply and the apparent cash conversion advantage disappears without any real business improvement. | ||
The dividend yield carries an explicit safety warning — the payout appears unsustainable relative to the company's underlying earnings power, meaning the headline yield overstates the reliable total return available to income-oriented investors. Catalyst breakdown | Quarterly EPS rises above $0.05 for four consecutive quarters with sequential improvement, establishing an earnings base sufficient to support the dividend without relying solely on free cash flow in excess of net income. | →Stable |
| CounterGiven that reported free cash flow runs at 1000% of net income, the actual cash available to service the dividend may substantially exceed what the income statement suggests, making the dividend more defensible than a strict earnings-coverage analysis implies. | ||
A business quality score of 3.8 sits below the 4.0 floor required to maintain a position, reflecting weak returns on assets and thin net margins that make this an unsuitable continuing holding without a genuine fundamental turn. Warnings | Actual quarterly EPS rises above $0.08 for four consecutive quarters, establishing an earnings trajectory that implies meaningful margin recovery. | ↑Improving |
| CounterQuality metrics are lagging by nature; a cyclical upturn in packaging volumes could lift asset returns and margins faster than historical scores suggest, erasing the quality deficit before the score officially clears the floor. | ||
The stock holds a golden cross with price above all major moving averages, RSI at 64, and rising on-balance volume, indicating continued institutional accumulation that has driven price to within 0.5% of the near-term resistance target. Momentum breakdown | Price sustains above the 200-day moving average and on-balance volume continues trending higher for the next two quarters, confirming the accumulation phase persists. | ↓Deteriorating |
| CounterMomentum in a low-quality packaging name can reverse sharply on a single miss; quarterly EPS in the $0.03 to $0.05 range leaves very little cushion before an earnings disappointment breaks the technical setup and triggers distribution. | ||
The company converts cash at roughly 1000% of reported net income, indicating that non-cash charges substantially depress stated earnings while the underlying cash generation engine remains materially stronger than the income statement implies.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 300% over the next four quarters, confirming the cash conversion advantage is structural rather than episodic.
CounterA 1000% FCF-to-net-income ratio likely reflects timing or non-recurring working capital effects; as net income normalizes upward, the ratio reverts sharply and the apparent cash conversion advantage disappears without any real business improvement.
The dividend yield carries an explicit safety warning — the payout appears unsustainable relative to the company's underlying earnings power, meaning the headline yield overstates the reliable total return available to income-oriented investors.
→StableCatalyst breakdown
- Expectation
- Quarterly EPS rises above $0.05 for four consecutive quarters with sequential improvement, establishing an earnings base sufficient to support the dividend without relying solely on free cash flow in excess of net income.
CounterGiven that reported free cash flow runs at 1000% of net income, the actual cash available to service the dividend may substantially exceed what the income statement suggests, making the dividend more defensible than a strict earnings-coverage analysis implies.
A business quality score of 3.8 sits below the 4.0 floor required to maintain a position, reflecting weak returns on assets and thin net margins that make this an unsuitable continuing holding without a genuine fundamental turn.
↑ImprovingWarnings
- Expectation
- Actual quarterly EPS rises above $0.08 for four consecutive quarters, establishing an earnings trajectory that implies meaningful margin recovery.
CounterQuality metrics are lagging by nature; a cyclical upturn in packaging volumes could lift asset returns and margins faster than historical scores suggest, erasing the quality deficit before the score officially clears the floor.
The stock holds a golden cross with price above all major moving averages, RSI at 64, and rising on-balance volume, indicating continued institutional accumulation that has driven price to within 0.5% of the near-term resistance target.
↓DeterioratingMomentum breakdown
- Expectation
- Price sustains above the 200-day moving average and on-balance volume continues trending higher for the next two quarters, confirming the accumulation phase persists.
CounterMomentum in a low-quality packaging name can reverse sharply on a single miss; quarterly EPS in the $0.03 to $0.05 range leaves very little cushion before an earnings disappointment breaks the technical setup and triggers distribution.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 2.6 |
| Gross margin | 0.0 |
| Op margin | 2.7 |
| Net margin | 0.5 |
| Current ratio | 4.2 |
| FCF quality | 10.0 |
| Moat | 5.5 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 495% FCF/NI
Growth
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.2 |
| EPS growth | 10.0 |
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.3 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 0.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 5.0 |
| Price target | 6.8 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 1.8 |
| growth rank | 8.3 |
- ▸Industry growth leader
Technical
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.9 |
| support resistance | 5.8 |
| 52w position | 6.7 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 6.8 |
| volatility | 3.8 |
| put call | 6.7 |
| implied vol | 6.7 |
| beta | 9.8 |
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 3.8 |
| news activity | 6.0 |
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:118d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.1<4.5
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.27
Upside
-1.9%
Downside
7.0%
Sizing output
AVOID
SetupRange Bound — RSI 52 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.1<4.5, ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.27 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.6, Insider at 7.3, and Value at 6.9; the weakest are Quality at 4.0, Momentum at 4.1, and Peer rank at 4.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.27 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Free Cash Conversion
Trip ifFree cash flow as a percentage of net income falls below 200% for 2 consecutive quarters.
- P2Quality Below Minimum Threshold
Trip ifActual quarterly EPS rises above $0.08 for 4 consecutive quarters, indicating a sustained earnings recovery.
- P3Momentum And Technical Accumulation
Trip ifRSI drops below 40 and on-balance volume turns negative for 4 consecutive weeks.
- P4Dividend Yield Sustainability Concern
Trip ifQuarterly EPS rises above $0.05 for 4 consecutive quarters with each quarter higher than the prior.