Boral – 1H21 Earnings

Boral is under Algo Engine sell conditions.

Boral delivered EBITDA of $486 million in 1H21, down 1% vs the same time last year.

Better results in North America were offset by weaker performance in Australia. Net debt was reduced and no interim dividend.

The company did not provide guidance on earnings but did note improving housing demand in North America, offset by softer demand in Australia.


20/5 Boral is in our focus following the price trading below our target of $2.50 and the short-term indicators now turning back up.

See highlighted support levels in the chart, a break below these levels will trigger a stop loss.

Buy BLD above $2.50.

The above post is from the 20th of May. We continue to see upside momentum in BLD.

3/6 Boral is now displaying an Algo Engine sell signal. We see overhead resistance near the $4.00 price range.

Boral – Resistance at $5.00

Boral is under Algo Engine sell conditions.

Boral disclosed that financial irregularities in its NAM Windows business will result in a US$20-30m EBITDA hit to its FY20 earnings. The announcement will weigh on Boral’s share price and we expect resistance to build at $5.00.



Boral – Deep Sell Off

Boral has been under Algo Engine sell conditions since forming a lower high at $5.75 back in July.

The share price is now down 30% from the July high and much of this selling occurred yesterday following the FY19 earnings result. Underlying NPAT was down 7%, at $440m & EBITDA was down 2%, at $1,037m.

A pick up in US housing and local infrastructure spending should help to underpin Boral’s earnings. The stock trades on 10x earnings and a forward yield of 5%.





Boral, CIMIC & Downer EDI

$280 billion in announced public infrastructure projects by 2020 in Australia, will help support growth for Boral, Downer EDI and CIMIC.

Boral & CIMIC are showing  Algo Engine sell signals, whereas, DOW is under a a recent Algo Engine buy signal.

All three names are attractive on a fundamental basis, however, the deep discount in Boral makes it our preferred allocation.




Boral – Valuation Review

Boral shares offer further upside as they recover from oversold conditions.

Based on FY20 earnings we assume Boral will generate $6bn in revenue and grow net earnings by 8% to $570mn. This places Boral on a low PE multiple of 10x earnings.

We have the stock now trading on a 5.5% dividend yield.



Boral – FY19 Trading Update

Boral has been under Algo Engine sell conditions since late 2017. The stock made a new low last month following the company downgrading FY19 earnings.

Weather and project delays were cited as the main reasons for earnings  coming in below prior forecasts.

With the share price falling from $8.00 in February 2018, to a low at $4.40 in March, value continues to stand out in historical terms.

Based on expected FY20 earnings, we have Error with ischart shortcode. No symbol attribute on 10x PE offering a 6% dividend yield.

Accumulating the stock throughout this year, will likely prove a long term  discounted entry level.





Housing Construction – Sell Signal

Boral, James Hardie Industries and CSR have rallied from oversold levels, as buyers have been attracted to the reduced PE multiples. The question is whether non-residential and engineering construction will offset the fall in residential construction volumes.

Australian housing approvals have been trending down for the past 6 months  with Jan approvals of 172k, down 30% on the same time last year.

BLD, JHX and CSR are now under Algo Engine sell conditions and we remain cautious given the broader market index back drop.

We consider Boral as the best recovery opportunity, but expect short-term sell pressure to persist.





Boral’s FY18 Results

Boral reported FY18 results which were ahead of market consensus , with net profits of $514 million.

North American guidance was a little weak, with one-off costs and
operational issues creating a drag on earnings, the market remains hopeful the risks on the Headwaters integration recedes.

Based on FY19 earnings growth of 12%, Boral now trades on a 3.8% forward yield. We remain cautious whilst the the lower high price formation and ALGO sell signal is in place.

Boral goes ex-div $0.14 on the 4th September.

Our preference in this sector remains CIM and DOW.