• Orora’s current Price/Sales ratio of 0.54 beats the Index P/S of 2.16.
  • Orora’s current Price/Earnings ratio of 12.53 beats the Index P/E of 15.33.
  • The share price has been dropping since the company posted positive FY 2023 financial results.

Orora provides packaging solutions to the grocery, fast-moving consumer goods, and industrial sectors in Australasia and North America. The company also offers in-store visual display solutions.

The company’s Half Year 2023 Financial Results released on 15 February were solid, with a 13.9% revenue increase and a 5.3% increase in underlying net profit after tax, with investors rewarding the company with a boost in the stock price.

Source: ASX

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Full Year 2023 Financial Results released on 17 August were also solid, with revenues increasing 4.9%, underlying net profit after tax up 8.5%, and dividend payments up 6.1%. The stock went into a trading halt, pending a transaction, which was updated on 31 August with the announcement of the potential acquisition of Saverglass, a manufacturer of high-end glass bottling. The stock price began to slide.

 

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The cost of the acquisition, the capital raise, and debt financing to pay for it soured investor appetite for the shares; however, it piqued the interest of analysts as Orora announced Saverglass would contribute to corporate earnings in its first year of operation.

Orora’s current dividend yield is 6.44%, with a five-year average yield of 4.7% and five-year average dividend payments of $0.14 per share, unfranked.

An analyst at Seneca Financial Solutions has a BUY recommendation on Orora shares, pointing to the share price “trading below average price/earnings ratio levels,” pushing the stock into trading at a discount. In addition, the Saverglass acquisition gives Orora new market share opportunities.

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