S&P/ASX 200 Index (ASX: XJO) stock Orica Ltd (ASX: ORI) has been on a tear since plumbing to 52-week lows in early April.
Shares in the mining and infrastructure solutions provider – and the world's largest commercial explosives manufacturer – closed up 1.92% on Friday, trading for $23.85 apiece.
That sees the Orica share price up a whopping 57% since the 7 April close of $15.23.
Taking a step back, Orica shares are up 36% since this time last year.
And that doesn't include the 57 cents a share in unfranked dividends the ASX 200 stock paid out over the 12 months. At Friday's closing price, this sees Orica shares trading on an unfranked dividend yield (partly trailing, partly pending) of 2.22%.
The final dividend payout of 32 cents a share is still up for grabs. If you're looking to bank that passive income payout, you'll need to own the stock at market close on 20 November. Orica shares trade ex-dividend on 21 November. You can then expect to get paid on 22 December, just in time for Christmas.
Now, here's why Macquarie Group Ltd (ASX: MQG) expects another year of outperformance from Orica shares.
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Macquarie tips ASX 200 stock for more outperformance
Orica shares closed up 2.5% on Thursday, the day the company reported its FY 2025 results.
The ASX 200 stock achieved a 6% year-on-year increase in sales revenue to $8.14 billion.
And earnings before interest and tax (EBIT) of $992 million were up 23% from FY 2024, marking the strongest year of earnings since FY 2012.
Looking to the year ahead, Macquarie noted, "ORI expects higher FY26 EBIT on pcp with improved earnings across three key segments and has started year 'with good momentum'."
In other core financial metrics, Orica reported net operating cash flow of $949 million, up 18% from last year.
Commenting on the strong cash flow results, Macquarie said:
Op cash flow of $949m was above our $887m and $808m pcp. This reflected 2 days improvement in days payable offsetting higher inventories. 2H cash flow conversion of 119% vs pcp of 118%.
On the bottom line, the ASX 200 stock reported a 32% boost in net profit after tax (NPAT) before significant items to $541 million.
Macquarie noted:
ORI posted FY25 underlying NPAT of $541m, above our $520m and $530m VisAlpha (VA) and +32% on $409m pcp. Beat on lower corp costs with $16m in 1H below-the-line legal bills and lower tax rate. $992m of FY EBIT the highest in 13 years.
Connecting the dots, Macquarie has an outperform rating on Orica shares. The broker increased its 12-month target price to $25.95 a share (from the prior $22.71 a share).
That represents a potential upside of 8.8% for the ASX 200 stock. And it doesn't include those upcoming dividends.
