Fletcher Building Ltd

FBU: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Fletcher Building Earnings: Cyclical Challenges Drag Down Sales, but Recovery Is on the Horizon

Johannes Faul

Aug 16, 2023

We maintain our NZD 6.00 (AUD 5.50) per share fair value estimate for no-moat Fletcher Building and consider the stock undervalued. Underlying fiscal 2023 EBIT rose 6% to NZD 798 million, in line with our expectations. Although sales disappointed, coming in 6% below our forecast, the group EBIT margin of 9.4% was stronger than we had anticipated, a solid outcome given the cyclical challenges facing the New Zealand and Australia construction sectors.

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