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Fletcher Building Ltd FBU

Stock XNZE
NZD 2.96 +0.05 (1.72%)
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As of Delayed Price Open

Company Report

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Fletcher Building: Lowering Our Fair Value Estimate After a Slew of Disappointing Events

Johannes Faul

Fletcher is more troubled than we had appreciated. After several weak announcements, including two earnings downgrades, we've taken a fresh look at the no-moat firm. We cut our fair value estimate by 52% to NZD 2.90 per share (AUD 2.70). We've revised our operating margin assumptions considering Fletcher’s persistently recurring significant costs and downgraded our near-term earnings with a weaker macroeconomic outlook.

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Bulls Say, Bears Say

Bulls

An improvement in the Australia business is likely to lift ROIC and increase shareholder value.

Bears

Fletcher operates in cyclical and competitive markets with minimal differentiation and is prone to periods of operating deleverage and structural margin compression

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Trading Information

Previous Close Price
NZD 2.91
Day Range
NZD 2.91–2.97
52-Week Range
NZD 2.86–5.64
Bid/Ask
NZD 2.96 / NZD 2.97
Market Cap
NZD 2.32 Bil
Volume/Avg
1.6 Mil / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
13.56
Price/Sales
0.28
Dividend Yield (Trailing)
5.50%
Dividend Yield (Forward)
11.00%
Total Yield
5.50%

Company Profile

Fletcher Building is a New Zealand-based building materials company with operations focused in New Zealand, but also extending to Australia. It has a conglomerate structure with diverse operations across concrete, building products, steel, retail distribution, construction, and development. Having previously expanded internationally through acquisitions, operations have gradually refocused on the New Zealand and Australian businesses.
Sector
Basic Materials
Industry
Building Materials
Stock Style Box
Mid Value
Total Number of Employees
3,851
Website
https://www.fletcherbuilding.com

Competitors

Valuation

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Metric
FBU
BLD
HOLN
Price/Earnings (Normalized)
 13.5631.9213.45
Price/Book Value
 0.663.021.70
Price/Sales
 0.281.791.65
Price/Cash Flow
 4.9910.728.44
Price/Earnings
FBU
BLD
HOLN

Financial Strength

Metric
FBU
BLD
HOLN
Quick Ratio
 0.642.031.08
Current Ratio
 1.692.491.44
Interest Coverage
 0.395.978.05
Quick Ratio
FBU
BLD
HOLN

Profitability

Metric
FBU
BLD
HOLN
Return on Assets (Normalized)
 0.40%5.74%5.64%
Return on Equity (Normalized)
 1.02%10.99%11.43%
Return on Invested Capital (Normalized)
 0.46%8.04%8.99%
Return on Assets
FBU
BLD
HOLN
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