Analysts cut Fletcher Building estimates after lower guidance
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The news: Analysts have downgraded their estimates for Fletcher Building after the building supplies company cut its full-year earnings guidance on Monday.
The numbers: The company’s revised forecast prompted Morgan Stanley analysts to cut their own earnings estimates for Fletcher by 18% for FY24 and 25% for FY25. They also lowered their ASX price target on the stock to $2.84 from $3.67 a share.
Morningstar analysts also lowered their FY24 earnings estimate and placed the stock under review as they revisit their outlook.
Goldman Sachs analysts cut their earnings estimate for FY24 by 12% and lowered their 12-month price target to $3.05 from $3.70 previously, but retained their ‘neutral’ rating on the stock.
Fletcher shares were down 3.5% to $2.77 in early trading on the ASX on Tuesday and have now lost more than 35% in the last 12 months.
The context: On Monday, Fletcher cut its full-year EBIT guidance to between NZD500 million ($455 million) and NZD530 million, down from its previous estimate of NZD540 million to NZD640 million.
The company, which posted a $113 million half-year loss in February, said second-half market volumes were down 10% in Australia and about 5% lower in New Zealand.
What they said: “The firm’s balance sheet health looks under some pressure … A near-term equity raise is possible and we need to assess the likelihood of it occurring and its materiality should it eventuate,” Morningstar said in a note.
The sources: Goldman Sachs research, Morningstar research, Morgan Stanley research
