Brambles (ASX:BXB) - Share price, News & Analysis

Q: What is the Fair Price of BXB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

BXB (A$10.88) is trading below our estimate of [[fair value]] (A$18.28)

BXB fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	3/6
Financial Health	3/6
Dividends	2/6

BXB Stock Overview

Brambles Limited operates as a supply-chain logistics company.

Rewards

Trading at 40.5% below our estimate of its fair value

Earnings are forecast to grow 6.25% per year

Earnings have grown 0.1% per year over the past 5 years

Risk Analysis

Has a high level of debt

Dividend of 2.84% is not well covered by earnings

Large one-off items impacting financial results

Brambles Competitors

Downer EDI

ASX:DOW

AU$3.5b

SG Fleet Group

ASX:SGF

AU$745.5m

Mader Group

ASX:MAD

AU$510.0m

Sugar Terminals

NSX:SUG

AU$370.8m

Price History & Performance

Summary of all time highs, changes and price drops for Brambles
Historical stock prices
Current Share Price	AU$10.88
52 Week High	AU$12.70
52 Week Low	AU$9.26
Beta	0.62
1 Month Change	-0.82%
3 Month Change	10.46%
1 Year Change	-2.94%
3 Year Change	-14.67%
5 Year Change	12.51%
Change since IPO	137.38%

Recent News & Updates

May 31

We Think Brambles (ASX:BXB) Can Stay On Top Of Its Debt

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

May 01

Brambles Limited's (ASX:BXB) Intrinsic Value Is Potentially 58% Above Its Share Price

In this article we are going to estimate the intrinsic value of Brambles Limited ( ASX:BXB ) by projecting its future...

Apr 17

Brambles (ASX:BXB) Knows How To Allocate Capital Effectively

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...

Shareholder Returns

	BXB	AU Commercial Services	AU Market
7D	3.7%	2.8%	1.4%
1Y	-2.9%	-7.6%	-11.3%

Return vs Industry: BXB exceeded the Australian Commercial Services industry which returned -7.6% over the past year.

Return vs Market: BXB exceeded the Australian Market which returned -11.3% over the past year.

Price Volatility

Is BXB's price volatile compared to industry and market?
BXB volatility
BXB Average Weekly Movement	5.2%
Commercial Services Industry Average Movement	8.1%
Market Average Movement	9.7%
10% most volatile stocks in AU Market	16.3%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: BXB is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: BXB's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1875	12,000	Graham Chipchase	https://www.brambles.com

Brambles Limited operates as a supply-chain logistics company. The company operates through CHEP North America and Latin America; CHEP Europe, Middle East, Africa and India; and CHEP Australia, New Zealand and Asia, excluding India segments. It engages in the pooling of unit-load equipment and associated services, focusing on the outsourced management of pallets, crates, and containers.

Brambles Fundamentals Summary

How do Brambles's earnings and revenue compare to its market cap?
BXB fundamental statistics
Market Cap	US$10.48b
Earnings (TTM)	US$544.10m
Revenue (TTM)	US$5.64b

19.3x

P/E Ratio

1.9x

P/S Ratio

Is BXB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BXB income statement (TTM)
Revenue	US$5.64b
Cost of Revenue	US$3.70b
Gross Profit	US$1.94b
Other Expenses	US$1.39b
Earnings	US$544.10m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.39
Gross Margin	34.32%
Net Profit Margin	9.65%
Debt/Equity Ratio	79.2%

How did BXB perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

56%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is BXB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BXB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BXB. This is calculated by dividing BXB's market cap by their current preferred multiple.
What is BXB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$10.48b

BXB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.3x
Enterprise Value/EBITDA	7.6x
PEG Ratio	3.1x

Price to Earnings Ratio vs Peers

How does BXB's PE Ratio compare to its peers?

BXB PE Ratio vs Peers

The above table shows the PE ratio for BXB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.4x
DOW Downer EDI	18.1x	13.4%	AU$3.5b
SGF SG Fleet Group	16.2x	21.0%	AU$745.5m
MAD Mader Group	22.9x	18.2%	AU$510.0m
SUG Sugar Terminals	13.6x	n/a	AU$370.8m
BXB Brambles	19.3x	6.2%	AU$15.1b

Forward PE

Price-To-Earnings vs Peers: BXB is expensive based on its Price-To-Earnings Ratio (19.3x) compared to the peer average (17.4x).

Price to Earnings Ratio vs Industry

How does BXB's PE Ratio compare vs other companies in the Global Commercial Services Industry?

Price-To-Earnings vs Industry: BXB is expensive based on its Price-To-Earnings Ratio (19.3x) compared to the Global Commercial Services industry average (16x)

Price to Earnings Ratio vs Fair Ratio

What is BXB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BXB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	19.3x
Fair PE Ratio	28.9x

Price-To-Earnings vs Fair Ratio: BXB is good value based on its Price-To-Earnings Ratio (19.3x) compared to the estimated Fair Price-To-Earnings Ratio (28.9x).

Share Price vs Fair Value

What is the Fair Price of BXB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BXB (A$10.88) is trading below our estimate of fair value (A$18.28)

Significantly Below Fair Value: BXB is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: BXB is poor value based on its PEG Ratio (3.1x)

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Future Growth

How is Brambles forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BXB's forecast earnings growth (6.2% per year) is above the savings rate (1.8%).

Earnings vs Market: BXB's earnings (6.2% per year) are forecast to grow faster than the Australian market (6% per year).

High Growth Earnings: BXB's earnings are forecast to grow, but not significantly.

Revenue vs Market: BXB's revenue (5.2% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: BXB's revenue (5.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BXB's Return on Equity is forecast to be high in 3 years time (20.9%)

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Past Performance

How has Brambles performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BXB has a large one-off loss of $242.4M impacting its December 31 2021 financial results.

Growing Profit Margin: BXB's current net profit margins (9.7%) are lower than last year (10.4%).

Past Earnings Growth Analysis

Earnings Trend: BXB's earnings have grown by 0.1% per year over the past 5 years.

Accelerating Growth: BXB's earnings growth over the past year (3.7%) exceeds its 5-year average (0.1% per year).

Earnings vs Industry: BXB earnings growth over the past year (3.7%) underperformed the Commercial Services industry 3.7%.

Return on Equity

High ROE: BXB's Return on Equity (21.7%) is considered high.

Discover strong past performing companies

Financial Health

How is Brambles's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BXB's short term assets ($1.3B) do not cover its short term liabilities ($2.0B).

Long Term Liabilities: BXB's short term assets ($1.3B) do not cover its long term liabilities ($3.0B).

Debt to Equity History and Analysis

Debt Level: BXB's net debt to equity ratio (71.5%) is considered high.

Reducing Debt: BXB's debt to equity ratio has reduced from 93.3% to 79.2% over the past 5 years.

Debt Coverage: BXB's debt is well covered by operating cash flow (79%).

Interest Coverage: BXB's interest payments on its debt are well covered by EBIT (14.7x coverage).

Balance Sheet

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Dividend

What is Brambles's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.84%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BXB's dividend (2.84%) is higher than the bottom 25% of dividend payers in the Australian market (2.75%).

High Dividend: BXB's dividend (2.84%) is low compared to the top 25% of dividend payers in the Australian market (6.85%).

Stability and Growth of Payments

Stable Dividend: BXB's dividend payments have been volatile in the past 10 years.

Growing Dividend: BXB's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (56.4%), BXB's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (171%), BXB's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure

CEO

Graham Chipchase (58 yo)

5.33yrs

Tenure

US$5,396,000

Compensation

Mr. Graham Andrew Chipchase has been the Chief Executive Officer and Executive Director at Brambles Limited since February 20, 2017, joined in Brambles at the beginning of January 2017. Mr. Chipchase serve...

CEO Compensation Analysis

Compensation vs Market: Graham's total compensation ($USD5.40M) is above average for companies of similar size in the Australian market ($USD4.11M).

Compensation vs Earnings: Graham's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: BXB's management team is seasoned and experienced (5 years average tenure).

Board Members

Experienced Board: BXB's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: BXB insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30