If you are hunting big returns for your investment portfolio, then it could be worth checking out the ASX 200 stock in this article.
That's because the team at Macquarie Group Ltd (ASX: MQG) believes it could generate market-beating returns over the next 12 months.
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Which ASX 200 stock?
The stock that Macquarie is bullish on is packaging company Orora Ltd (ASX: ORA).
According to the note, the broker was pleased to see the company reiterate its guidance at this week's annual general meeting. This is being supported by a strong performance from its cans business. It said:
Cans remains the bright spot. We fct cans vols +4% in FY26, in line with LTA along with benefit from Revesby expansion partially offset by higher allocated corp costs. We fct 4% cans EBIT growth in FY26E, accelerating to 10% in FY27E.
Macquarie also highlights that the Saverglass business is performing largely in line with expectations. Though, a large second half skew is expected. The broker adds:
Saverglass (SG) 1Q vols in line with pcp (FY25 vols -12%) with continuation of adverse product mix re wine/champagne (ORA has pursued growth in latter which has lower rev/t vs spirits). FY SG EBIT guidance for flat EBIT is unchanged (this on constant ccy basis hence 1H should see benefit from lower A$). However there's a skew to 2H with lower 1H EBIT vs pcp and stronger expected in 2H due to timing of cost actions from Le Havre closure (=€9m benefit over two years) and modestly higher vols (we fct +2% in 2H26).
Big potential returns
In response to the ASX 200 stock's trading update at its annual general meeting, Macquarie has reaffirmed its outperform rating with a trimmed price target of $2.35 (from $2.40).
Based on the current Orora share price of $2.01, this implies potential upside of 17% for investors over the next 12 months.
In addition, the broker is forecasting a 4.7% dividend yield in FY 2026. This boosts the total potential return to over 21%.
Macquarie thinks investors should be buying this ASX 200 stock while it is undervalued. Particularly given how its free cash flow is expected to improve now that it has move on from its peak capex spend. It concludes:
O/P $2.35 TP. Share price expectations for ORA are relatively low, so FY guidance reiteration was positive in that context albeit with a slightly bigger skew for SG. ORA's free cash flow is set to improve from here as move past peak capex, while buybacks are supportive in the near term.
