A Fresh Look at Brambles’ Emerging Market Exposures Yields an 8% FVE Uplift; Shares Are Attractive

Shares in best idea Brambles remain attractive, trading at a 15% discount to our revised AUD 12.90 per share fair value estimate. We’ve raised our valuation for the wide-moat name by 8% following a review of Brambles’ long-term potential in key emerging markets. The opportunity for Brambles to secure substantial long-term growth from already large and fast developing emerging markets, or EMs, is immense. As the global leader in supply chain pallet pooling solutions, Brambles possesses all the necessary attributes to ultimately unlock value in EMs. Specifically, first-mover advantages, global industry leadership and a rich track record of prior expansion success are key attributes that deliver confidence in Brambles’ ability to establish flourishing EM businesses. Despite these credentials--and an existing portfolio of fledgling EM positions--equity markets presently fail to fully appreciate Brambles’ long-term EM potential.