Orora will report FY21 results on August 19 and UBS expects EBIT growth of 6%. Forecasts are largely backed backed by the performance improvement program for US distribution and strength in Australian beverage can volumes.
The balance sheet remains strong with leverage at 1.2x that is well below target yet M&A in North America is likely to be off the cards, UBS suggests, until the business can demonstrate a sustained improvement in organic growth.
A turnaround in North America is considered key to any re-rating. Neutral maintained. Target rises to $3.65 from $2.90.
Sector: Materials.
Target price is $3.65.Current Price is $3.62. Difference: $0.03 – (brackets indicate current price is over target). If ORA meets the UBS target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
