Latest news with #FletcherBuilding
NZ Herald
16-05-2025
- Business
- NZ Herald
Fisher and Paykel Healthcare, Fletcher drive NZ stocks lower
Big falls in Fisher and Paykel Healthcare and Fletcher Building combined to drive the New Zealand sharemarket lower after what had been a strong start to the month. The S&P/NZX 50 Index closed down 0.73% or 94.03 points at 12,786.79, with 24.9 million shares worth $95.04 million trading. There were
Yahoo
16-05-2025
- Business
- Yahoo
At NZ$3.46, Is It Time To Put Fletcher Building Limited (NZSE:FBU) On Your Watch List?
Fletcher Building Limited (NZSE:FBU), is not the largest company out there, but it led the NZSE gainers with a relatively large price hike in the past couple of weeks. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Fletcher Building's outlook and valuation to see if the opportunity still exists. Our free stock report includes 1 warning sign investors should be aware of before investing in Fletcher Building. Read for free now. Great news for investors – Fletcher Building is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is NZ$4.79, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Fletcher Building's share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it's there, it may be hard to fall back down into an attractive buying range again. Check out our latest analysis for Fletcher Building Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Though in the case of Fletcher Building, it is expected to deliver a relatively unexciting top-line growth of 8.9% in the next few years, which doesn't help build up its investment thesis. Growth doesn't appear to be a main reason for a buy decision for the company, at least in the near term. Are you a shareholder? Even though growth is relatively muted, since FBU is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation. Are you a potential investor? If you've been keeping an eye on FBU for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy FBU. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for Fletcher Building and you'll want to know about this. If you are no longer interested in Fletcher Building, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: New Zealand companies face uncertainty amid US tariffs and global slowdown
Its economic forecast for New Zealand saw a reduction in real GDP growth in 2025 to 1.4%, down 0.5 percentage points. Growth for the Asia Pacific region – seen as strongly exposed to tariff shock – is expected to slow to around 3.9% and 4% in 2025 and 2026, respectively, down from 4.6% in 2024 and 4.4% in 2025, the IMF said. The uncertainty made forecasting difficult during the most recent reporting season, although company outlook statements did come in positive overall, according to Forsyth Barr's quantitative scorecard of the results. 'Trump tariffs and a major capital raise clouded the December earnings season, making it feel worse than it actually was,' Forsyth Barr analysts Aaron Ibbotson and Matthew Leach said in their research note. 'Our overall scorecard yielded a net negative result, but only modestly so. Cost-out programmes, demand as weak as expected and a surprising net positive outlook are our main takeaways. 'Earnings are still being downgraded as the recovery is pushed out at least another six months, but the pace of downgrades has slowed meaningfully,' they said. The February 2025 reporting season, dominated by the property and aged care sectors, showed earnings per share (EPS) growth was below expectations – weighed down by the likes of Fletcher Building and Meridian Energy reporting large losses compared with the previous corresponding period. Overall revenue growth was slightly better than expected though. Of the 31 NZX-listed companies that reported results, 11 reported ahead of Forsyth Barr's EPS expectations, four were in line and 16 were below. 'Downgrades continue to feature with net negative revisions across the board from revenue to the bottom line for both FY26 and FY27,' the analysts noted. The bright spot was the a2 Milk Company, which increased its first-half net profit by 7.6% to $91.7 million and recorded an 18.8% post result one-day share price gain. The biggest miss came from Spark NZ, which reported a 78% decrease in first-half net profit and a 17.8% post-result one-day share price decline. Forsyth Barr noted that both companies have a limited read across the New Zealand economy, whereas Fletcher was more hitched. 'We upgraded our estimates for cyclical bellwether Fletcher Building for the first time in over two years. It felt bleak but was in line with our low expectations.' One company result to look out for later this month is Mainfreight, a major logistics and transport company that is also seen as an economic bellwether. The company reports its first-half results on May 29. Earlier this month, Mainfreight said it expected its profit before tax and sales revenues for the March 2025 year to be above market consensus expectations of $375m and $5.1 billion, respectively. 'However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to US,' the company noted. The stock staged a decent recovery in the aftermath of the update. Geoff Zame of Craigs Investment Partners said in a daily newsletter that Mainfreight's update calmed market concerns about a tariff-induced slowdown in global growth impacting that company's earnings. At the macro level, uncertainty around tariffs remains a theme, Milford Asset Management portfolio manager Mark Riggall said in a recent note to clients. 'Just three short months ago, investor expectations were of ongoing US outperformance, both economically and from the stock market. Now, expectations are rapidly changing as fading US growth, policy headwinds (partly from tariffs), AI [artificial intelligence] fatigue and stronger stimulus impulses overseas (notably the German fiscal package) have upended the outlook for various asset markets. 'Looking ahead, uncertainty around tariffs and other government policy in the US lowers our conviction levels. But a policy-induced slowdown can also be mitigated by a policy reversal, an outcome that is likely at some point in the future.' Duncan Bridgeman is managing editor of NZME Business, including the Business Herald and BusinessDesk.
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: NZ's strategic edge in a tumultuous global market
New Zealand capped off 2024 with an 11.4% gain in the NZX 50 Index, demonstrating improved investor sentiment as inflation cooled and interest rates eased. Secondary market activity saw material uplifts, with investors supportive of growth pipelines and balance sheet recapitalisations of large, established New Zealand assets; more than $5 billion has been raised via follow-on offerings over the past 18 months. Leading many of these processes, Jarden has been part of the shift in how New Zealand companies approach capital raising; most notably, through the use of ANREOs (Accelerated Non-Renounceable Entitlement Offers) in the New Zealand market. First employed under the new NZX Listing Rules for Heartland Group's $210 million raise last year, ANREOs enable tighter pricing compared to a renounceable raising structure, a faster execution timetable and more certainty for existing shareholders subscribing for additional shares at a fixed price. Fletcher Building's September 2024 $700m and Ryman Healthcare's February 2025 $1b raises – both led by Jarden – incorporated ANREO components following Heartland's positive market reception. The growing use of ANREOs brings New Zealand into closer alignment with Australian market norms, with recent activity reflecting a maturing attitude and understanding that the right balance of structural innovation, pricing and fairness can drive better overall shareholder outcomes. This holds true both during and following equity raise execution. Fletcher Building's 2024 equity raising delivered strong aftermarket performance, achieving a two-week return of 15% relative to its theoretical ex-rights price (TERP), outperforming the -2.5% median of recent New Zealand Accelerated Renounceable Entitlement Offer (AREO) structures the market was more familiar with. Retail investors were better off under the ANREO structure and received an overall value accretion (even if they didn't participate), given the potential value of rights in an AREO offer implied by precedents was likely outweighed by trading performance. Recent secondary market activity has also evidenced a strong appetite for quality growth investment propositions. Auckland Airport's $1.4 billion equity raise last year, the largest follow-on offer in NZX history, was project-linked, supporting the construction of a new terminal as part of a $6.6b capital expenditure programme. Strong investor demand reflected the confidence the market has in Auckland Airport's long-term strategy. The trend of NZX/ASX dual listings continues with Ryman Healthcare announcing alongside its recent equity raise that it is pursuing a secondary listing on the ASX, geared towards enhancing attractiveness to offshore capital and liquidity. This trend is particularly relevant for companies in sectors where Transtasman investor familiarity is high. Future New Zealand outlook Although the Reserve Bank cut the Official Cash Rate by 200 basis points from 5.5% in August 2024 to 3.5% on April 9, President Donald Trump's protectionist rhetoric and tariff disruptions have brought significant, fresh volatility to capital markets; the US market reached a five-year high in volatility (per the VIX Index) in early April, and the S&P 500 is down ~4.0% year to date. Following suit, the NZX 50 is down ~4.6% year to date. Global uncertainty has catalysed a focus on defensive assets and execution capability, meaning investors will look to transfer capital from globally exposed sectors into what are perceived as 'safe haven' geographies. In this context, New Zealand, with its relative political stability and robust legal framework, becomes more attractive to offshore capital. This outlook is coupled with an expectation that deal momentum will improve in 2025. Private equity exits were down 50% in 2024, stretching holding periods beyond five years and increasing the pressure on private equity firms to recycle capital. Also observed are emerging valuation gaps between public and private markets, leading to private equity sponsors directing dry powder towards listed companies with stable cashflow profiles and under-levered balance sheets. At the same time, local corporates have become open to strategic M&A – either to divest non-core assets or consolidate in sectors facing structural headwinds. The proposed divestment of Fonterra's consumer brands business (Mainland) is an example of this trend playing out locally and globally. IPO-specific future outlook New listings have remained scarce, with no major NZX IPOs since 2023 – higher market volatility and interest rates stalled most post-Covid IPO ambitions. Heightened investor selectivity and global macro uncertainty continues to weigh on the risk appetite of investors in considering new listings, which directly affects the valuations private shareholders can achieve. While the IPO window may be limited for smaller growth assets with a more speculative outlook, large and well-established businesses in mature markets, such as in the case of the Fonterra's Mainland divestment, remain strong candidates for IPOs. ASX sentiment supports this thesis, with predominantly large growth businesses, such as the IPOs of Digico and Guzman y Gomez, successfully listing in 2024. Helping to improve New Zealand's future IPO outlook are forthcoming regulatory changes, including amendments to prospective forecast information disclosure and lodgement requirements. These changes will reduce costs, lower friction for potential issuers and improve execution certainty, increasing IPO accessibility. An optimistic second half With both supply and demand-side drivers of M&A activity elevated, New Zealand capital markets are poised for continued momentum despite global volatility. Our pick is a continuing trend of secondary issuances using the ANREO structure, IPOs of high-quality assets in the second half of 2025 and calendar year 2026, as well as an inflow of foreign capital interested in New Zealand 'safe haven' opportunities. All in all, a positive outlook.
Yahoo
17-04-2025
- Business
- Yahoo
Fletcher Building (NZSE:FBU) Could Be At Risk Of Shrinking As A Company
When researching a stock for investment, what can tell us that the company is in decline? A business that's potentially in decline often shows two trends, a return on capital employed (ROCE) that's declining, and a base of capital employed that's also declining. This reveals that the company isn't compounding shareholder wealth because returns are falling and its net asset base is shrinking. So after glancing at the trends within Fletcher Building (NZSE:FBU), we weren't too hopeful. Our free stock report includes 1 warning sign investors should be aware of before investing in Fletcher Building. Read for free now. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Fletcher Building is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.061 = NZ$403m ÷ (NZ$8.4b - NZ$1.8b) (Based on the trailing twelve months to December 2024). Therefore, Fletcher Building has an ROCE of 6.1%. Ultimately, that's a low return and it under-performs the Building industry average of 10%. View our latest analysis for Fletcher Building Above you can see how the current ROCE for Fletcher Building compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for Fletcher Building . We are a bit worried about the trend of returns on capital at Fletcher Building. To be more specific, the ROCE was 7.6% five years ago, but since then it has dropped noticeably. And on the capital employed front, the business is utilizing roughly the same amount of capital as it was back then. This combination can be indicative of a mature business that still has areas to deploy capital, but the returns received aren't as high due potentially to new competition or smaller margins. If these trends continue, we wouldn't expect Fletcher Building to turn into a multi-bagger. In summary, it's unfortunate that Fletcher Building is generating lower returns from the same amount of capital. In spite of that, the stock has delivered a 18% return to shareholders who held over the last five years. Either way, we aren't huge fans of the current trends and so with that we think you might find better investments elsewhere. Like most companies, Fletcher Building does come with some risks, and we've found 1 warning sign that you should be aware of. While Fletcher Building isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
