S&P/ASX All Ords Index (ASX: XAO) shares are down 1% to 8,932.6 points on Friday.
Meanwhile, Ord Minnett has released new research notes on two ASX All Ords shares.
Let's see what the broker has to say, as well as its new 12-month price targets for the stocks.
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Virgin Australia Holdings Ltd (ASX: VGN)
The Virgin Australia share price is $2.65, down 0.8% today and down 17% over 12 months.
Virgin Australia is the nation's No. 2 airline behind market leader Qantas Airways Ltd (ASX: QAN).
Ord Minnett updated its Virgin model after the carrier retired its last remaining Airbus A320 in June.
This reduced the Virgin fleet to just two types – 104 Boeing 737s across various models and four Embrauer E190-E2 jets.
In its new note, the broker said it had adjusted its expectations given Virgin's new planes, just delivered, would raise seat capacity.
The increased share of seats for the newer aircraft models, said to have more than 17% better fuel efficiency than older models it will replace, should reduce fuel consumption per available seat kilometre (ASK) by 5% across the network, generating around $50 million in cost savings per annum.
The airline's balance sheet is robust enough for its fleet renewal plans, in our view, despite the large step-up in capital expenditure to more than $900 million annually and expected higher payments for 'heavy' maintenance work as leases expire.
We also highlight a significant planned increase in the share of owned aircraft in its fleet to about 50% by FY32, up from 30% currently, with outright ownership affording Virgin improved lending terms and reduced costs in the longer term versus leasing.
The broker kept its buy rating on this ASX All Ords travel share and raised its target from $3.80 to $3.90.
This suggests a potential 47% upside for Virgin Australia shares in FY27.
Orora Ltd (ASX: ORA)
The Orora share price is $1.46, up 0.5% today and down 30% over 12 months.
Orora designs and manufactures aluminium cans and glass bottles, mainly for beer, wine, and spirits, in Australia and other nations.
Ord Minnett reviewed its Orora model to take into account growing evidence of people drinking less alcohol worldwide.
In its new note, the broker said:
Data from analytics group Nielsen shows American spirits volumes fell 7% year-on-year (YoY) in the three months to mid-June, while in Europe, spirits volumes lost 3.5% YoY in the three months to mid-May.
Meanwhile, in Australia, retailers such as Coles noted a sharp deterioration of circa 20% in sales from its big-box liquor stores in the March quarter…
Ord Minnett also highlights the risk of a material write-down of the value of its Saverglass business – bought for $2.2 billion in 2023 but now seemingly valued by the market at circa $850 million – and its Gawler plant – where a $200 million investment was recently made in plant upgrades and repairs – unless end-market demand starts to revive.
Ord Minnett kept its accumulate rating on this ASX All Ords materials share on valuation grounds, but cut its target from $1.70 to $1.55.
This implies a potential 6% upside for Orora shares in FY27.
