Best Idea Update: Brambles Posts the Resilient Q1 2021 Performance We’d Expected; Shares Compelling

Best Idea Brambles’ fiscal 2021 year-to-date performance exhibited all of the resilience to coronavirus pandemic-induced economic fallout that we’d expected. Constant currency sales grew 5% in the first quarter, with demand for its global pallet pooling franchise unabated despite the materially weakened macroeconomic backdrop in Brambles’ key geographies of the U.S., Europe, and Australasia. Investors cheered the impervious first-quarter sales performance, pushing the stock an approximate 6% higher following the announcement. Nonetheless, we continue to see further upside in the wide-moat name with Brambles’ long runway of secular growth and defensive characteristics remaining compelling. Brambles trades at an approximate 15% discount to our unchanged AUD 12.00 per share fair value estimate.