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Ardagh Metal Packaging (AMBP)

Aluminium beverage cans · #3 globally · Americas ~59% / Europe ~41% of revenue · ~76% owned by Ardagh Holdings
FCFF to the firm (EBITDAaL basis) · equity as levered residual · multiple cross-check · reverse DCF · refresh of 10/14 build · valued 2026-10-15
OVERVALUEDRISK: HIGH
Price $4.63 · Base $2.35 · Price is +97% above base

What they do

Ardagh Metal Packaging makes aluminium beverage cans and ends for global brewers, soft-drink bottlers, and fast-growing categories such as energy drinks, hard seltzers and sparkling water. It is the world's #3 can maker behind Ball and Crown. It runs 23 plants in 9 countries with ~6,500 staff. 2025 revenue was $5.5B, and TTM revenue to Q2-26 is ~$6.0B.

Two segments. Americas (US plus Brazil): Q2-26 revenue $1,015M (59%), adj. EBITDA $135M. Europe: revenue $698M (41%), adj. EBITDA $105M. Europe is growing volumes (+5% in Q2). The Americas are shrinking (North America −5% on contract resets, Brazil −15%).

How it makes money. It earns a conversion margin on multi-year supply contracts. Aluminium, which is most of the cost, is passed through to customers with a lag. So revenue rises and falls with LME aluminium and regional premia, while EBITDA per can is fairly stable (~$0.13 of EBITDA per $1 of sales). Can-making is capital-heavy: maintenance capex runs ~$150M/yr, and the company leases a lot of its assets.

Key sensitivities. Volumes and contract repricing with large customers. Aluminium timing (±$10–15M a quarter). US tariffs and the Midwest premium, which affect working capital and customer demand. EUR/BRL. Above all, leverage and interest rates: ~$4.2B of net debt sits under a $2.8B market cap. Majority owner Ardagh Holdings is controlled by former creditors and has hired Evercore to sell its stake.

Price (10/15 intraday, +7%)
$4.63
Base intrinsic value
$2.35
Bear → Takeout · prob-wtd
$0.59 – $5.15 · $2.60
Key driver
EV/EBITDA: each 1.0x turn = $1.31/sh (28% of price)

The Take — The court cleared the sale path, not the math. Use today's pop to sell the yield.

What moved the stock today. AMBP is up ~7% intraday ($4.33 → $4.63) after reports that a Luxembourg judge lifted the order that had blocked Ardagh Holdings (AHSA) from selling its ~76% stake. Dissenting ARD Finance PIK noteholders obtained that order ex parte in September, and AHSA had been challenging it. The ruling reopens the Evercore-run sale process. It does not create a bid. No buyer, price or timetable has been disclosed, and the noteholders could still keep litigating. The "€2.74B" figure in the headlines is a press valuation of the unit, not an offer. Nothing about operations, guidance or the balance sheet changed today.

What changed vs the 10/14 build. Price +8% ($4.27 → $4.63), so the premium to base widened from +84% to +97%. Base value is $2.35, versus $2.32 yesterday. No input changed: the model was rebuilt and its terminal NOPAT treatment differs by about 0.5%. The rebuilt scenario engine also fades scenario growth toward terminal, which moves the bear case to $0.59 (was $0.41) and the bull case to $4.12 (was $4.26). One correction: yesterday's report said the price needed ~$899M of normalized EBITDA. That figure was inconsistent with the model's own sensitivity (~$0.54/share per $50M). At today's price, the DCF needs ~$982M of normalized EBITDA forever, which is +26% vs the FY26 guide midpoint of $782M. Alternatively it needs a 6.8% WACC on a B3-rated, 5x-levered issuer. The market now pays 8.85x 2026E EBITDA (was 8.6x). Our DCF is worth 6.7x.

The low PEG is a mirage. The screen's PEG of ~0.77 rests on EPS growth from a near-zero base (trailing P/E ~80x), flattered by one-time items such as the tariff refund. Those items do not recur. We value EBITDA and FCFF, which strip them out. Caveat: I could not find the refund quantified in the Q2-26 release, so I have not modelled it.

The equity is still a thin sliver on a $4.2B debt stack. Net debt including leases is $4,155M, or 5.2x LTM EBITDA. Moody's puts AMP above 7x on its adjusted basis, with negative cash flow, and specifically flags the ~$240M/yr dividend. Book equity is −$750M. The $0.40 dividend costs $239M a year against ~$62M of 2026 FCF after interest, leases and capex. 2021–25 FCF after leases totalled −$187M, while $1.04B was paid out in dividends. One more point for minority holders: AMP estimates ~$30M/yr of standalone costs if the AHSA services agreement ends in a sale. That is ~$0.40/share at 8x, and it lands on AMP's P&L unless a strategic buyer absorbs it.

The bull case is a sale, and today's price already pays for most of it. A strategic buyer at 9.25x 2026E EBITDA would pay $5.15, only 11% above today. Even if we raise the takeout probability from 15% to 25%, the probability-weighted value is $2.79. The asymmetry is ~$0.50 of upside if a full-company deal prints, against ~$2 of downside if the process stalls, AHSA sells its stake privately with no minority premium, or the dividend is cut.

Call: Holders: today's pop is the exit. Trim or exit into $4.60–5.00. Sell or avoid above ~$3.50. Accumulate only below ~$2.50 (≈ base, where even a halved dividend yields ~8%). Do not short it outright. A whole-company takeout at 9–10x would print $5–6 overnight, and the ruling makes that more plausible. A bearish view with defined risk: a Jan-27 $4.50/$3.50 put spread, never financed with a short call. Holders who want to wait for the sale: write Jan-27 $5 covered calls, which caps you near the takeout value while you collect the premium. Next print: Q3-26 around Oct 22 (Ardagh Group reports 10/22; AMP has not confirmed a separate date). The Q3 EBITDA guide is $200–210M against $208M a year ago, so watch for the dividend and any sale update.

Risk Profile — HIGH

HIGHLeverage / refinancing. Net debt is 5.2x EBITDA (company basis; Moody's adjusted >7x), equity is negative, and the rating is B3. The 2029 unsecured notes will reprice ~+400bp. Short: higher-for-longer rates (10Y 5.2%) and credit spreads.
HIGHDividend sustainability. ~$239M is paid out against ~$62M of 2026 FCF. A cut would re-rate the yield-buyer shareholder base. Short the payout.
HIGHParent / control / litigation. The court lifted the block on 10/15, but the PIK noteholders may keep fighting. Long: a whole-company takeout at 9–10x. Short: AHSA sells its stake privately with no premium, $30M/yr of standalone costs, or the process stalls.
MEDVolumes & contract resets. In Q2, North America was −5% and Brazil −15%. Long: cans gaining share from glass/PET, and Europe at +3–5%.
MEDAluminium & tariffs. LME prices and premia pass through with a lag (±$10–15M a quarter). Tariffs inflate working capital and can squeeze customer volumes. One-off refunds flatter EPS, not value.
LOWFX. EUR/BRL translation, partly hedged naturally by EUR-denominated notes.
What the "inventory" really is: a stable, low-growth can-making cash flow (~$770M EBITDA, ~$616M after leases). Almost all of it is already spoken for by capex, interest, leases and tax. The equity owns the residual of a residual, so its value is a leverage-amplified bet on the exit multiple. Today's ruling raised the odds that someone sets that multiple. It did not raise the multiple itself.

Scenario values per share vs price

Bear$0.59Base$2.35Bull$4.12Takeout 9.25x$5.15Prob-wtd$2.60Price 10/15$4.63
Bear: normalized EBITDA $720M, 1% growth, leases 22% of EBITDA, WACC +50bp, g 1.5%. Base: $770M, 3% fading to 2%, leases 20%, WACC 8.0%. Bull: $790M, 4.5% fading, leases 18%, WACC −50bp. Takeout: 9.25x 2026E EBITDA of $782M, less $4,155M net debt (incl. leases), no minority discount. Prob-weighted 25/45/15/15 (bear/base/bull/takeout, same weights as 10/14): $2.60. At 25/40/10/25: $2.79.

Driver tornado — value/share from base $2.35

WACC ±50bp$1.63$3.21Normalized EBITDA ±$50M$1.81$2.89Marginal ROIC 9% / 15%$1.62$2.79Maintenance capex $175M / $125M$1.82$2.88Growth yrs 1–5: 1% / 5%$2.06$2.67Lease cost 22% / 17% of EBITDA$2.06$2.79Terminal g 1.5% / 2.5%$2.15$2.59
WACC (±50bp → $1.63–$3.21) and normalized EBITDA (±$50M → $1.81–$2.89) each swing value by ±25–35%, the signature of a levered residual. No single swing reaches the $4.63 price.

Master driver: equity value/share by EBITDA × EV/EBITDA (net debt $4,155M incl. leases)

EBITDA ($M) ↓ / EV÷EBITDA →6.5x7x7.5x8x8.5x9x9.5x10x
650 · ND/EBITDA 6.4x$0.12$0.66$1.20$1.75$2.29$2.84$3.38$3.92
700 · ND/EBITDA 5.9x$0.66$1.25$1.83$2.42$3.00$3.59$4.17$4.76
739 (FY25) · ND/EBITDA 5.6x$1.08$1.70$2.32$2.94$3.56$4.18$4.79$5.41
782 (FY26 guide) · ND/EBITDA 5.3x$1.55$2.21$2.86$3.52$4.17$4.82$5.48$6.13
825 · ND/EBITDA 5.0x$2.02$2.71$3.40$4.09$4.78$5.47$6.16$6.85
875 · ND/EBITDA 4.7x$2.56$3.30$4.03$4.76$5.49$6.22$6.96$7.69
Green = ≥5% above the $4.63 price; yellow = within ±5%; orange = 5–30% below; red = more than 30% below. Every $50M of EBITDA ≈ $0.67/share at 8x, and every 1.0x of multiple ≈ $1.31. The market is paying 8.85x on the FY26 guide. Our DCF EV ≈ 6.7x.

Sensitivity: value/share by WACC × terminal growth (base FCFF)

WACC (yrs 1–5 → stable) ↓ / terminal g →1.5%2.0%2.5%
7.0% → 6.75%$3.88$4.26$4.73
7.5% → 7.25%$2.94$3.21$3.55
8.0% → 7.75%$2.15$2.35$2.59
8.5% → 8.25%$1.48$1.63$1.80
9.0% → 8.75%$0.90$1.01$1.14
The price is reached only at a WACC of ~6.8–7.0% with terminal g of 2–2.5%. That WACC is below the cost of the company's own secured debt plus a sliver of equity. Same color scale as above.

History — revenue, adj. EBITDA, EBIT ($M) and EBITDA margin

RevenueAdj. EBITDAEBITEBITDA margin (line)4.1B65920214.7B62520224.8B60020234.9B67220245.5B73920256.0B793TTM Q2-2616.3%13.3%12.5%13.7%13.4%13.2%
Revenue swings with aluminium prices. EBITDA has stayed in a $600–800M band since listing, and the margin decline reflects metal pass-through, not lost economics.

History — FCF after leases minus dividends ($M)

-2692021-6902022-932023-782024-972025-76TTM Q2-26
Negative every year: the dividend has been funded with debt since the 2021 SPAC listing.

Normalization worksheet ($M)

YearRevenueAdj. EBITDAMarginEBITLease pmtsEBITDA − leasesCapexFCF after leasesDividendsCoverage
20214,05565916.3%31648611679-2690n/a
20224,68962513.3%26359566585-439251−1.75x
20234,81260012.5%177785223681702630.65x
20244,90867213.7%218975751671862640.70x
20255,49773913.4%2711116281731652620.63x
TTM Q2-265,99179313.2%3091346591871742500.70x
5-yr avg4,79265913.8%24979580394-37208
Unchanged from the 10/14 build; there has been no new reporting period. Adj. EBITDA is company-reported (2022–25; 2021 and TTM from stockanalysis/company H1). Revenue, EBIT, capex, lease payments, FCF (OCF − capex − lease principal) and dividends (common + preferred) are from stockanalysis.com (IFRS). SBC is immaterial. 2021–22 capex was elevated by the US/Germany/Brazil growth programme. R&D is not material (no capitalization).
What normalization says. The 5-yr average adj. EBITDA is $659M and the 5-yr average EBIT is $249M. 2026 guidance of $775–790M is a cycle high and includes favourable metal timing. We normalize at $770M: above the 5-yr average to credit the 2021–22 capacity build, below the guide to strip timing. Normalized EBITDAaL (after ~20% lease cost) ≈ $616M. Economic NOPAT (treating maintenance capex as depreciation, 25% tax) ≈ $400M on ~$3.4B of invested capital, giving ROIC ~12%, which we use as the marginal return on growth capex. EBITDA, not EBIT, is the clean anchor here. GAAP EBIT is depressed by Rexam-era intangible amortization (~$340M of D&A including acquired intangibles), and exceptional items are small ($4M in Q2-26).

Base-case FCFF ($M)

YearEBITDAgEBITDAaLTaxEcon. NOPATCapexFCFFWACCPV
20277933.0%634744063162368.00%218
20288173.0%654784163232428.00%208
20298413.0%673834262703108.00%246
20308673.0%693884362783178.00%233
20318933.0%714944472863258.00%221
20329182.8%7341064492843347.95%211
20339412.6%7531184512813447.90%201
20349642.4%7711304532783537.85%192
20359852.2%7881394572763657.80%183
203610052.0%8041424662733817.75%178
Terminalg 2.0%, ROIC 12% → reinvest 17% of NOPAT; stable WACC 7.75%TV 6,7433,145
Leases are treated as an operating cost (lease cash ~17–27% of EBITDA; the $325M liability has a ~2–3-yr average life and is effectively recurring opex), so net debt in the bridge excludes leases. Tax is 25% on EBITDAaL − D&A. Capex = maintenance (~19.5% of EBITDA) + growth capex (g × NOPAT ÷ 12% ROIC) + $60M/yr in 2027–28 for Spain/UK capacity. ΔWC = 40% of ΔEBITDA. PV explicit 2,090 + PV terminal 3,145 = EV 5,235. Less net debt ex-leases of 3,830 gives equity of 1,405, or $2.35/share. Terminal share 60% (below the 70% flag). Stable ROIC 12% vs WACC 7.75%.

Cost of capital (re-run at $4.63)

Risk-free (10Y UST)5.20%
Mature ERP4.40%
Unlevered beta (metal/glass packaging) 0.65, relevered at market D/E 1.46 (debt ex-leases $4,048M / mkt cap $2,767M; 25% tax)1.36
Brazil CRP, revenue-weighted (~18% × ~3.5%)0.60%
Cost of equity11.80%
Pre-tax cost of debt (secured 2031s ~6.3–7%, unsecured 2029s ~8–9%) / after-tax7.25% / 5.44%
Debt weight (market, ex-leases)59.4%
Computed WACC (8.02%) → used yrs 1–5 → stable8.00% → 7.75%
The higher share price lowers the debt weight and the levered beta, and the two effects roughly cancel. WACC is unchanged from 10/14.

Inputs & equity bridge (6/30/26, $M)

Operating value (DCF EV)5,235
− Senior secured + green notes · ABL drawn · other(4,002) · (28) · (18)
+ Cash189
Net debt ex-leases (used; leases already in EBITDAaL)(3,830)
Lease obligations (memo; inside the $4,155M company net debt)325
Preferred shares · NCI · pensions€250M prefs redeemed Q4-25 (now debt) · none material
Equity value ÷ 597.7M shares1,405 → $2.35
Q2-26 revenue / adj. EBITDA (Europe / Americas)1,713 / 240 (105 / 135)
FY26 guide adj. EBITDA · Q3 guide775–790 · 200–210
Liquidity · book equity647 · −750
Dividend$0.40/yr ($239M, 8.6% yield)
Market cap / EV (incl. leases) / EV ÷ 2026E EBITDA$2.77B / $6.92B / 8.85x
Street (Robinhood 10/15): 1 Buy / 6 Hold / 2 Sell; mean PT $5.04 (range $4.50–6.00)Multiple-based; ignores the dividend gap
Sources: Robinhood quote, fundamentals and analyst ratings (10/15/26); GuruFocus and MarketBeat (10/15/26) on the Luxembourg court ruling and today's +7.7% move; Packaging Insights (9/21/26) on the ex parte order obtained by ARD Finance noteholders; Paperjam (10/15/26) on Moody's ratings and leverage; AMPSA 6-K (8/13/26) on the AHSA sale process, Evercore and ~$30M standalone costs; AMP Q2-26 results 6-K (7/23/26); Ardagh Group Q3-26 call notice (10/22/26); prior AMBP valuation (10/14/26) and stockanalysis.com IS/BS/CF for history. Educational analysis, not investment advice.