MS sees Aussie construction sector washed away by excessive rains

Adbri

13/04/2022 05:42

** Australian construction sector remains under pressure
from excessive rains over the past few months, observes Morgan
Stanley
    ** Brokerage adds that after building materials maker Boral
Ltd  BLD.AX  last month flagged http://acquia-prod.boral.com/sites/corporate/files/media/field_document/20220322-Trading-update-and-FY2022-guidance.pdf
 a hit to its FY22 earnings from excessive rains and lower sales
volume, it sees more stocks to get impacted
    ** Downgrades construction materials maker Adbri Ltd
 ABC.AX  to "equal-weight" from "overweight", and cuts price
target to A$3.40 from A$3.60 on earnings risk
    ** Sees ABC as "most at risk" on exposure to construction
materials, greatest weather risk, and earnings exposed to New
South Wales and Queensland, states which faced adverse weather
conditions
    ** Adds that CSR Ltd  CSR.AX  (equal-weight, A$6.60) remains
well positioned to benefit from robust housing activity remain
in the short term
    ** MS sees opportunity for BLD from improving macro
dynamics, cost-out and property; rates it equal-weight with
A$3.20 price target
    ** ABC, heavily exposed to Victoria in terms of revenue,
faces impact to its 1H22 results from adverse weather
conditions, says MS
    
    

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))