Orora: Plenty more to come

About the author:

Alex Lu
Author name:
By Alex Lu
Job title:
Date posted:
18 August 2023, 9:30 AM
Sectors Covered:

  • Orora's (ASX:ORA) FY23 result was above expectations with earnings for both Australasia and North America ahead of our forecasts.
  • Key positives: Group EBIT margin +50bp to 7.5%; Balance sheet remains healthy with ND/EBITDA of 2.0x at the bottom end of management’s 2.0-2.5x target range.
  • Key negatives: Revenue was softer than anticipated (-5% vs MorgansF and -4% vs Bloomberg consensus); Group ROFE fell 60bp to 21.6%.
  • Management has guided to higher earnings in FY24.
  • We increase FY24-26F EBIT by 5% while underlying NPAT rises by only 1-3% mainly due to higher interest costs.
  • Our PE-based target price moves to (login to view) and we maintain our Add rating. Trading on 15.5x FY24F PE and 5.0% yield, we think the valuation remains attractive despite the recent strong performance in the share price.

Find out more

Download full research note

You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.

If you would like more information, please contact your adviser or nearest Morgans office.

Request a call Find local branch

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

  • Print this page
  • Copy Link