Update shared on09 Sep 2025
Fair value Decreased 1.12%Analysts have trimmed Brambles' price target to A$24.80 amid concerns that the recent share price rally has outpaced fundamentals, with limited improvement in the financial outlook and valuation now exceeding intrinsic value.
Analyst Commentary
- Share price rally seen as excessive relative to underlying fundamentals and forecasts.
- Recent company results provided limited positive change to financial outlook.
- Scarcity premium for high-quality, offshore-exposed operators driving valuation above intrinsic value.
- Target price raised to reflect sector re-rating and market demand, despite unchanged core forecasts.
- Bearish analysts now expect negative total return at higher valuation, prompting downgrade.
What's in the News
- JPMorgan downgraded Brambles to Neutral from Overweight despite raising its price target to A$24.50, citing a remarkable share price rally that outpaced earnings forecasts and resulted in a now-negative total return outlook (Periodicals).
- Brambles authorized a new share buyback plan on August 21, 2025, aiming to repurchase up to 136.7 million shares (10% of issued capital) for $400 million by June 2026, to maximize shareholder value (Key Developments).
- For FY26, Brambles issued guidance of 3-5% sales revenue growth and 8-11% underlying profit growth at constant currency (Key Developments).
- The company announced a cash dividend of USD 0.2083 per share for the six months to June 30, 2025, payable on October 8, 2025 (Key Developments).
- Brambles has been added to the S&P/ASX 20 Index as of June 20, 2025, and reported repurchasing over 29.9 million shares under its prior buyback program by late June (Key Developments).
Valuation Changes
Summary of Valuation Changes for Brambles
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from A$25.08 to A$24.80.
- The Future P/E for Brambles has significantly risen from 23.11x to 34.99x.
- The Discount Rate for Brambles remained effectively unchanged, moving only marginally from 6.73% to 6.72%.
Disclaimer
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