The trading update has highlighted there has been no material changes in the business and Morgans assumes Orica is comfortable with consensus estimates for FY21. Some markets continue to be affected by the pandemic and Latin America by unrest.
Morgans maintains FY21 forecasts but reduces FY22 and FY23 forecasts because of the cyclical and structural issues that are impacting the business. Nevertheless solid earnings growth is anticipated.
The business is considered well-positioned over the medium term and a Hold rating is maintained. Target is reduced to $13.65 from $14.56.
Target price is $13.65.Current Price is $12.47. Difference: $1.18 – (brackets indicate current price is over target). If ORI meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).