Orica (ORI) Update

Submitted by Share Trading on Fri, 18/04/2008 - 02:39.

Orica (ORI) has a $34.22 share price target and an Outperform stock recommendation from sharemarket analyst Macquarie Research Equities.

ORI: Trading Idea

Orica (ORI) - Outperform
Current Price: $30.50
Target Price: $34.22 (~12.19% Upside)
P/E: 17.4 X
Div Yield: 3.2% (35% Franked)

Orica (ORI) Technicals:

ORI has its 1H08 NPAT result due on 28th April and MRE are forecasting a 1H NPAT pre significant items of $238m, a 17% increase on pcp. ORI has seen some support around $28 of recent times, and looks to be consolidating around the $30 level. MRE believes the upcoming result could be a catalyst to kick ORI on towards its Target Price at $34.22.

Orica (ORI) Fundamental View:

Macquarie Research Equities (MRE) Fundamental View:
1. MRE forecasts a 10% lift in EBIT for the mining services division, driven by strong ongoing demand.
2. Focus going forward is ORI’s leverage to improving domestic Ammonium Nitrate (AN) volume and price fundamentals as infrastructure bottlenecks ease and contract rollovers-occur
3. Consumer products looks capable of continuing it’s recent strong performances supported by superior brand positioning
4. ORI’s solid balance sheet can only be viewed positively in the current environment.
5. Catalyst: 28 April 1H result / Indonesian AN capacity upgrade.

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