Orora shares boosted by Morningstar's 'overweight' rating
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The news: Shares in packaging giant Orora lifted on the ASX as Morgan Stanley resumed coverage on the stock with an 'overweight' rating.
The numbers: Orora shares were up 1.3% to $2.31 by 3:50pm AEDT, having retreated nearly 20% over the last 12 months.
Morgan Stanley set a 12-month price target of $2.70 for Orora. It also lowered its earnings forecasts following the sale of the company's North American packaging solutions business Orora Packaging Solutions (OPS) late last year.
Its EBIT forecasts reduced by 21% in FY25 and 33% in FY26.
The context: Morgan Stanley analysts said Orora took better-than-expected net proceeds from the OPS sale and the move leaves the company as a "focused beverage packaging business with quality assets, minimal net debt, and attractive cash flow potential".
They analysts also noted that potential US tariffs actions have driven Orora's share price down in recent weeks, with a 25% tariff on Mexican goods into the US posing a net negative for the company. However, they said the downside is "well and truly" priced into the current share price.
The source: Morgan Stanley research
