The company expects to complete the sale of the fibre business by the end of the month. Credit Suisse now assumes $750m is distributed by way of a special dividend of $0.62. A $200m buyback is then expected in FY21.
The broker assumes the packaging distribution business suffers a -20% drop in earnings (EBIT) in FY21. The Australasian beverage packaging business is likely to gain from pantry stocking beer and soft drinks.
Outperform rating maintained. Target is reduced to $2.15 from $3.40.
Target price is $2.15.Current Price is $2.45. Difference: ($0.30) – (brackets indicate current price is over target). If ORA meets the Credit Suisse target it will return approximately -14% (excluding dividends, fees and charges – negative figures indicate an expected loss).