Orica (ORI) and the Resources Boom

Submitted by Share Trading on 10 April, 2008 - 13:07

Orica (ORI) commentary by Australian stock analysts Macquarie Research. They see 15% further upside to this stock.

Resource Services, Real Winner in Sector Boom!

Orica (ORI) is one of the leading manufacturers of industrial and specialty chemicals along with commercial explosives and mining chemicals. On Monday 28th April the company reports its first half results and these are expected to exceed expectations. With Macquarie Research Equities (MRE) predicting this to be around 42%, many investors are beginning to buy up the stock. It is this buy in that has seen the share price jump over 20% in the last month.

The key driver for the stock going forward is ORI’s leverage to improving domestic Ammonium Nitrate volume and price fundamentals as infrastructure bottlenecks ease and contract roll-overs occur. Consumer Products are expected to continue their recent trend of strong performances supported by superior brand positioning. In addition to this, the company has strong currency exposure, which will further enhance returns as the US$ strengthens.

MRE sees a further 15% upside for this stock with first half results being the gearing catalyst. ORI is well placed to capitalise on the current market environment, with strong future demand. As the market moves more in its favour it will only be better placed to capitalise on current and future growth opportunities.