ORI | TAKEOVER TARGET, page-19

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Thursday, 30 September 2021

ORI - ORICA LIMITED

Credit Suisse rates ORI as Outperform (1) - After a FY21 trading update, Credit Suisse points out impairments to Burrup and the EMEA division do not appear to reflect a fundamental change in Orica’s outlook. The broker retains its Outperform rating and lifts its target price to $16.11 from $15.66.

After management comments, the broker feels volume is possibly better and ammonia cost impacts not as material as previously forecast.

While gas and ammonia costs are likely to remain a headwind through to the first half of 2022, contract cost pass through should result in a recovery of most of these costs in the second half.

Target price is $16.11 Current Price is $12.04 Difference: $4.07 If ORI meets the Credit Suisse target it will return approximately 34% (excluding dividends, fees and charges). Current consensus price target is $13.76, suggesting upside of 14.3%(ex-dividends)The company's fiscal year ends in September.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 23.02 cents and EPS of 49.05 cents . At the last closing share price the estimated dividend yield is 1.91%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.55. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.0, implying annual growth of 17.5%. Current consensus DPS estimate is 23.8, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 50.49 cents and EPS of 76.53 cents . At the last closing share price the estimated dividend yield is 4.19%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.73. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.2, implying annual growth of 40.4%. Current consensus DPS estimate is 39.5, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 17.2.

Market Sentiment: 0.4All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources