Credit Suisse downgrades Orica
March 24, 2010
Credit Suisse lowered its recommendation on ORI (NEUTRAL, price target $29.35) despite remaining positively disposed towards the company. The Swiss broker said the downgrade reflected a number of negative one-off items and recent share price strength.
Credit Suisse pointed to the environmental provision for the Botany remediation, which is to take place over the next year, the Hexachlorobenzene provision and the Pharmaceuticals tax case.
Despite these “below the line” issues, as well as the recent run in Orica’s share price, the broker believes earnings growth is set to continue as Australian and Indonesian mining volumes remain robust.
The key uncertainty for the group is around the speed and extent of recovery in the US.
Credit Suisse pointed to the environmental provision for the Botany remediation, which is to take place over the next year, the Hexachlorobenzene provision and the Pharmaceuticals tax case.
Despite these “below the line” issues, as well as the recent run in Orica’s share price, the broker believes earnings growth is set to continue as Australian and Indonesian mining volumes remain robust.
The key uncertainty for the group is around the speed and extent of recovery in the US.
Leave a Reply