Orica

Orica (ORI) Update provided by Australian stockmarket analyst Macquarie Research Equities.

AN Prices Set To Explode

ORI has long been a solid performer due to it’s exposure to the current resources super cycle. ORI has traded erratically as has the broader market of late, but looks like it could be priming itself for a potential jump north in the near future….

Source: Weekly
Past performance is not a reliable indicator of future performance.

Here is an update on the different sectors of Australian market from market analyst Macquarie Research Equities.

Record Oil - The Impact of Black Gold

Orica (ORI) has a target price of $33.50 and an Outperform recommendation from Australian Stockmarket analyst Macquarie Research Equities..

Orica (ORI) – Money to Be Made In Ammonia

Orica (ORI) has a price target of $32.30 from Australian stock analyst UBS

Yara to proceed with Burrup AN plant

New 350kt ammonium nitrate (AN) plant:

Global fertiliser group, Yara International, has announced a Memorandum of Understanding with Burrup Holdings to build a new 350kt AN plant on Western Australia's Burrup Peninsula. Yara will handle the marketing of the AN, which represents its first entry into the Australian AN market.

Regional oversupply temporarily emerges in 2012:

Orica (ORI) has a reiterated Buy stock recommendation and a $34 share price target from Australian stockmarket analysts from Citi.

Orica Ltd: Staying bullish on pricing outlook

Bullish industry outlook overrides result — Orica delivered a mixed result, 6% short of our forecast. We retain our positive view, driven by an increasingly positive outlook for explosive prices on the back of tighter fertiliser markets and sharply higher capacity replacement costs. We reiterate our Buy recommendation and $34.00 target price.

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:

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) have a reiterated Outperform recommendation and a valuation of either $31.56 on a DCF basis and $32.52 on a sum of parts basis from Australian stockmarket analyst Macquarie Research Equities. The company have revealed that it has missed out on the DSI acquisition, with the private equity firm CVC acquiring the business for a reported sum of in excess of €1bn. Orica shares sunk on the news, but have today recovered as investors reassess the outlook for the stock after the failed transaction. The analysts still like the outlook for ORI, and reiterate their outperform recommendation and highlight the potential for another private equity bid beyond the prior $32.00 offer. Financial discipline being shown. It is positive that ORI is showing financial discipline in not pursuing acquisitions at a price which does not meet its 18% Return on Net Assets (RONA) criteria. Capital management must now be high on the agenda. ORI has ~$1bn of debt capacity to pursue acquisitions, growth options and/or capital management. The analysts would expect now to see Orica (ORI) to move swiftly to complete its existing buyback program (~$100m remaining). ORI's last buyback notice was 18 June, so presumably the buyback has been on hold pending an outcome on DSI. In the absence of other acquisition opportunities, ORI clearly has capacity for larger capital management (a $1bn buyback would be equivalent to 10% of issued capital). ORI’s capital management potential should come to the fore particularly with the stock at sub $30 and ORI having rejected a $32 bid. Private equity likely to remain attracted by ORI’s undergeared balance sheet. Ironically, ORI missing out on DSI is likely to keep private equity interested in ORI as it remains undergeared with gearing of only 32% (vs ORI's 35–45% target and ~75–80% which PE would gear to). ORI's M&A focus may turn to WES' CSBP, which in a recent report, the analysts valued at $1.3–1.6bn. As with DSI, ORI faces the same issue in that it is difficult to find acquisitions in this environment that meet its strict 18% RONA hurdle. The analysts still thinks that there is potential for a higher private equity bid to emerge beyond the prior $32 bid. MRE said at the time that PE could pay $34.80 and still achieve a 15% IRR. MRE’s underlying valuation for ORI (ie ex the bid) is $31.56 on a DCF basis and $32.52 on a sum of parts basis.