Orora Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Orora Limited (ASX:ORA) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to AU$2.22 in the week after its latest half-yearly results. Revenues of AU$2.4b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of AU$0.67 an impressive 833% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Orora

After the latest results, the consensus from Orora's eleven analysts is for revenues of AU$2.07b in 2025, which would reflect a disturbing 59% decline in revenue compared to the last year of performance. Per-share earnings are expected to bounce 70% to AU$0.21. Before this earnings report, the analysts had been forecasting revenues of AU$3.66b and earnings per share (EPS) of AU$0.14 in 2025. So there's been quite a change-up of views after the latest results, with the analysts making a serious cut to their revenue forecasts while also granting a great increase in to the earnings per share numbers.

The analysts have cut their price target 9.1% to AU$2.53per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Orora, with the most bullish analyst valuing it at AU$3.11 and the most bearish at AU$2.10 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 83% by the end of 2025. This indicates a significant reduction from annual growth of 4.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Orora is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Orora following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Orora's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Orora analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Orora (1 is potentially serious!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.