Orora Continues Solid Recovery with Strong Product Demand
- Orora shares continue higher as global economies reopen.
- Orora shares have risen 20 per cent Year to date.
- The company expects earnings to be higher in FY21 against the prior year.
Orora Limited (ASX: ORA) currently stands at the forefront of a surge in demand for many packing materials domestically and internationally. The packaging solutions company has seen tremendous success in recent months, with the company’s share price surging 20 per cent this year alone. Heightened demand for glass bottles and plastic packing following a strong economic rebound from COVID-19 have allowed Orora to restore business lost during the pandemic continually.
Orora Limited, previously owned by Amcor, provides a wide range of packing and visual communication solutions, including point of purchase displays, packaging equipment, recycling paper, printing and signage. Glass bottles, aluminium cans, boxes and cartons. The company operates 46 manufacturing plants across of variety jurisdictions with an extremely close correlation to the general level of consumer consumption.
A Market insights report into Global Glass Packaging Materials revealed that demand for Glass Materials has accelerated in recent years and is expected to do so moving forward. In particular, glass beer bottle consumption is currently accelerating and with economies reopening is likely to be a key source of revenues for Orora. Chief Executive Officer Brian Lowe commented how their “market-leading beverage business continues its track record of earnings growth.”
In February of 2021, Orora released their half-year report to the market, with net profits after tax of $91.1 million, an 18.9 per cent increase on the prior corresponding period (pcp). Likewise, on a constant currency basis, sales revenue rose 3.1 per cent on pcp. Following the announcement, shares in Orora surged 5.49 per cent.
A sharp sell-off in US Tech Stocks dragged the S&P 500 and the NASDAQ lower yesterday by 0.67 and 1.88 per cent, respectively, leaving the Dow Jones slightly in the Green. Today Orora shares have lifted slightly today following these capital flows opening 1.25 per cent higher, continuing the company’s recent breakout from resistance. The share price opened trading on the 5th of May 2021 at $3.25 per share, a remarkable 49 per cent increase from 6-year lows set in September last year.
Today, Credit Suisse also raised their price target on Orora based on their own analysis f “North American Packaging Solutions earnings margins and upgraded Earnings per share estimates for the following financial years.
Moving forward the company will look to take advantage of increased consumer activity and consumption continually. Providing costs can be managed appropriately and passed onto customers, Orora's future outlook remains strong. The company has forecasted wine bottle exports to be negatively impacted by Chinese restrictions but, at a Group level, still expect earnings to be higher in FY21 against the prior year.