Credit Suisse is constructive regarding Orica yet downgrades to Neutral from Outperform ahead of the FY21 result. Commodity cost pressures are likely to have increased throughout the second half and extend into the first half of FY22.
Higher import parity pricing is expected to create a more favourable environment allowing the company to increase prices, providing some offset. The broker upgrades the target to $17.23 from $16.11.
Target price is $17.23.Current Price is $15.28. Difference: $1.95 – (brackets indicate current price is over target). If ORI meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).