Are Orora shares a buy following their half-year results?

ASX 200 stock Orora Ltd (ASX: ORA) hit a new 12-month high on Thursday after the company announced a new share buyback following a “robust” half year result.

The question is, will the share price hold up or has it got a bit ahead of itself?

Let’s look at the results first. The bottle and packaging maker posted a first-half net profit of $58.9 million, up $58.7 million from what was effectively a breakeven position for the same period last year.

This was achieved on revenue of $1.12 billion, up 9.7%.

Orora Managing Director Brian Lowe said it was a “robust operating result for the first half of FY26, underpinned by disciplined execution”.

He added:

In line with our full year guidance, we achieved EBITDA growth across all businesses, reflecting the strength of our operating platform and the benefits of our recent investments and business optimisation actions. Market dynamics and trading conditions vary across Orora’s business segments. Favourable market dynamics in Cans, including the continued consumer preference shift to aluminium and growth in new beverage categories, has supported 11.2% volume growth. Despite softness in premium spirits and wine, disciplined execution supported performance across glass, with Saverglass volumes up 2.6% in the first half primarily driven by tequila and vodka categories.

Mr Rowe said the company was maturing from a high capital expenditure phase to one defined by more cash generation.

So, what do analysts think?

The team at Barrenjoey said the earnings were in line with expectations, and that key full-year guidance was reiterated.

But they believe there are headwinds ahead, noting:

Going forward, we believe performance in Saverglass will drive the share price given the division has the widest range of earnings outcomes and represents roughly half of Orora’s enterprise value. Fundamentally, we think it will be difficult for Saverglass to grow earnings at the rate consensus expects unless alcohol trends improve materially to support sales volume and pricing power. Cost management in Saverglass has been a key focus since the acquisition and will need to continue if our cautious view on alcohol consumption persists.

The Barrenjoey team has a price target of $2 on Orora shares, compared with the current share price of $2.17.

The team over at Macquarie were more positive on the stock, with an outperform rating and a $2.45 price target.

They said regrading the result that, “no bad news was good news”, and it was good to see Saverglass volumes growing.

They said there were more positives than negatives out of the half year report and the “worst appears to have passed for Saverglass and cost out initiatives increase leverage to recovery”.

The new buyback announced on Thursday will purchase up to 10% of the company’s stock on issue.

The post Are Orora shares a buy following their half-year results? appeared first on The Motley Fool Australia.

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• Orora earnings: robust half-year profit growth and outlook
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Orora. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.