The company’s trading update was slightly weaker than Morgans expected. Orora has noted a slower start in 2019, primarily in North America. Challenging conditions are ongoing and the company is reviewing cost structures as appropriate.
Renewable energy agreements entered in FY18 are providing greater certainty for electricity costs and the company does not expect a material impact going forward.
Morgans believes recent weakness in the share price offers an attractive entry point for long-term investors. Add rating maintained. Target is reduced to $3.47 from $3.61.
Sector: Materials.
Target price is $3.47.Current Price is $3.07. Difference: $0.40 – (brackets indicate current price is over target). If ORA meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
