Brickworks: Business positioned to navigate a softer FY24

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Liam Schofield
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By Liam Schofield
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Date posted:
28 September 2023, 8:00 AM
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  • We were slightly surprised by the share price reaction post the results release for Brickworks (ASX:BKW), down c.10% intra-day (closing down 6.4%). The two factors we perceive as driving the fall were a) the headline decline in EBITDA - which was more a function of one-off property sales in the prior year, and b) the soft commentary for building products - which the company has been flagging since HY22. Interestingly, the MD’s tone at the analyst briefing was more positive than the presentation commentary suggests, with comments that the downturn would likely be relatively short, with early signs for improved demand on the back of supply shortages.
  • With industrial real estate markets coming off an exceptionally strong year and the backlog of housing work going a long way to bridge the gap from low housing commencements, we see cause for optimism amongst the uncertainty. On this basis, we retain our ADD rating, increasing our target price to (login to view).

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