Lockdowns, labour shortage to hit AU, NZ building suppliers FY22 show - Citi

CSR

04/08/2021 05:37

** Citi says Australia's booming residential market has
raised hopes that the infrastructure sector would post strong
earnings in August but recent curbs and likely construction
delays may weigh on fiscal 2022 earnings
    ** Industry-wide issues like labour shortage and disruption
from reinstatement of lockdowns could defer project timelines
and push back product sales, brokerage adds
    ** Housing prices will remain elevated for about 6 months,
Citi adds, noting that commodity prices have already started
unwinding 
    ** NZ-listed Fletcher Building Ltd  FBU.NZ  and Australia's
CSR Ltd  CSR.AX  are our top "buy" picks as due to high demand,
their pricing could offset some weakness in volumes - Citi
    ** FBU and CSR are the most exposed to delays in housing
starts but the risk is reflected in their stock prices
    ** U.S. is the most preferred region as its homebuilding
market goes from strength to strength, however, that's priced
into North America-exposed stocks like James Hardie Industries
 JHX.AX  and Reece Ltd  REH.AX  

    

 (Reporting by Anushka Trivedi in Bengaluru)
 ((Anushka.Trivedi@thomsonreuters.com; +918061823241;))