Boral Earnings: Turnaround Gathers Momentum With Volume and Margins Stronger Than Expected

We raise our fair value estimate for no-moat Boral by 22% to AUD 4.40 per share after fiscal 2023 results and a transfer of coverage to a new analyst. Our material upgrade reflects a number of changes, including a more optimistic view on the construction cycle. We previously factored in a significant medium-term construction downturn, but that now looks unlikely, particularly given Boral’s exposure to the resilient nonresidential and infrastructure markets. Solid population and GDP growth, supported by immigration, should underpin longer-term demand for the infrastructure, nonresidential, and housing markets. Nearly 70% of revenue is tied to infrastructure, engineering, and nonresidential projects, with the remainder nearly all driven by housing demand, both new and renovations.