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Investment firms punt the ‘lower end’ of Fletcher forecasts

The building materials conglomerate has been accused of ’misallocation of capital’ given market conditions.

Key points
  • What’s at stake: Fletcher Building is a major cap firm, listed on both the NZX and ASX. It is, however, significantly exposed to the residential market and the impact of a number of legacy projects.
  • Background: Fletcher Building has been in freefall on the NZX following another sharp earnings downgrade, and has effectively shed $1.4b in market capitalisation over a year that seen significant destruction of capital. With the trans-Tasman residential market looking soft and the company exposed to more margin pressure and seasonal shifts in demand, investment houses are downgrading the company ahead of its June results.
  • Main players: Fletcher Building, Forsyth Barr, Craigs Investment Partners, Nick Traber, Cameron Parker,  Rohan Koreman-Smit, Paul Koraua. 

 

Forsyth Barr has shifted gears on Fletcher Building, re-rating the stock down from outperform to neutral, after the company’s sharp earnings downgrade on Monday.

The firm has also reduced its 12-month NZX target price by a fifth to $3.80, though that remains above a $3.35 target allocated by

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Brent Melville Wed, 15 May 2024
Contact the Writer: bmelville@nbr.co.nz
News tip? Question? Typo? Let us know: editor@nbr.co.nz
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Key points
  • What’s at stake: Fletcher Building is a major cap firm, listed on both the NZX and ASX. It is, however, significantly exposed to the residential market and the impact of a number of legacy projects.
  • Background: Fletcher Building has been in freefall on the NZX following another sharp earnings downgrade, and has effectively shed $1.4b in market capitalisation over a year that seen significant destruction of capital. With the trans-Tasman residential market looking soft and the company exposed to more margin pressure and seasonal shifts in demand, investment houses are downgrading the company ahead of its June results.
  • Main players: Fletcher Building, Forsyth Barr, Craigs Investment Partners, Nick Traber, Cameron Parker,  Rohan Koreman-Smit, Paul Koraua. 

 

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Investment firms punt the ‘lower end’ of Fletcher forecasts
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