Amcor (ASX:AMC) largely de-risked its fiscal fourth quarter with free cash flow broadly in line despite the Middle East conflict, Jefferies said in a note on Monday.

It only has around 5% resin sourcing exposure to the Middle East and seems to have managed inflationary impacts into the fourth quarter via resin pass-through mechanisms. Thus, minimal to no impact on operating earnings is expected from resin volatility, with management confident it can quickly recapture inflationary impacts.

It guided down free cash flow to AU$1.5 billion to AU$1.6 billion from around AU$1.8 billion to AU$1.9 billion, noting temporary resin price impacts, while holding more inventory to ensure customer supply.

The investment firm has a buy rating on Amcor while lowering its price target to AU$70.77 per share from AU$71.83 per share.