Morningstar sees Orica's Terra Insights acquisition of neutral value

ORICA

21/12/2023 02:14

(Updates with Morgan Stanley note)
    ** Morningstar sees immaterial contribution to sales in FY24
and no contribution to earnings from Australian explosives maker
Orica's  ORI.AX  Terra Insights acquisition
    ** Morgan Stanley sees Terra Insights' earnings before
interest and tax (EBIT) contribution to ORI in FY24 to be
largely offset by transaction costs
    ** Morningstar maintains fair value estimate of A$16.50 per
share for ORI; Morgan Stanley maintains "Overweight" stock
rating and PT of A$19.50/shr
    ** Morningstar sees Terra Insights contribute around A$100
mln ($67.65 mln) of revenue and A$40 mln of EBITDA from FY25
    ** While synergies are referred to, no quantification or
indication of where these will come from - Morgan Stanley
    ** 11 of 12 analysts rate the stock "Buy" or higher, 1
"Hold"; their median PT is A$17.92 – LSEG data
    ** Stock has risen 7.6% YTD, as of last close

    
($1 = 1.4782 Australian dollars)

 (Reporting by Rajasik Mukherjee in Bengaluru)
 ((Rajasik.Mukherjee@thomsonreuters.com))