Citi reduces US ammonia price assumptions by -6% for FY23, to US$900/t, and by -19% for FY24. Urea prices are expected to decline by -6% in FY23. Uncertainties abound, including the prospect of rate hikes, exacerbated by supply chain disruptions from the Russia/Ukraine conflict.
The broker remains Neutral on Orica given the current volatility and estimates are unchanged as lower prices and volume growth assumptions have already been factored in. Target is reduced to $16.20 from $16.40.
Target price is $16.20.Current Price is $15.57. Difference: $0.63 – (brackets indicate current price is over target). If ORI meets the Citi target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).