What is driving Amcor PLC (NYSE: AMCR) stock

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Amcor PLC (NYSE: AMCR) stock surged over 6% on 12th May, 2020 (as of 10:12 am GMT-4 ; Source: Google finance). Overall year to date volumes were 0.2% higher and the remaining 0.7% representing unfavorable price/mix.

The company in the year to date (nine months in FY 20) has reported the 1.8% fall in the net sales to $9,325 million compared to the prior period in constant currency terms. Year to date net sales for the Flexibles segment had fallen by 1.4% compared to the prior period in constant currency terms.  Overall year to date segment volumes had also fallen by 0.2% lower than the last year, with higher volumes in the Flexibles North America and Flexibles Europe, Middle East and Africa businesses offset by lower volumes in Flexibles Latin America and for specialty carton products.

Moreover, In North America, year to date volumes rose in the low single digit range, mainly due to strength in the high value healthcare, pet care, protein, liquids and home and personal care end markets as well as specialty folding carton products.  In Europe, low single digit year to date volume growth was on the back of rise in volumes in dairy, pet care, coffee, medical, ready meal and snack products.  In Asia Pacific, year to date volumes had grown across the Asian emerging markets notwithstanding lower volumes in China through January and February and lower volumes in India in March.

For fiscal 2020, the company has raised its EPS outlook. The company is now expecting the adjusted constant currency EPS growth in fiscal 2020 to be in the range of approximately 11-12% compared to previous forecast of the range 7-10%, which implies a constant currency EPS range of 64.6 – 65.2 US cents per share (previously 62.0 – 64.0 US cents per share). The company expects 2020 free cash flow (before dividends) to be over $1 billion before approximately $100 million of cash integration costs, which represents equivalent to $300 – $400 million after dividends. The Company also expects corporate expenses before synergies to be in the range of $160 – $170 million in constant currency terms, net interest costs to be in the range of $190 – $200 million (previously $210 – $230 million) in constant currency terms  and adjusted effective tax rate to be in the range of 21% – 23%.

In addition, Amcor projects the synergy benefits to be of approximately $80 million (pre-tax) in fiscal 2020, and is on track to achieve $180 million (pre-tax) in synergy benefits by the end of fiscal 2022.

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