BXB – UBS rates the stock as Neutral

A survey of pallet users in the US found Brambles’ CHEP satisfaction levels to be the lowest. The brand no longer has a strong advantage in cost. Price growth will moderate to 2% in FY21 from 4% in FY20, suggests the survey.

UBS has reduced its earnings estimates to cater to the weaker read through from the survey and increasing lumber costs.

The broker remains concerned about the lack of operating leverage seen in the second half.

UBS maintains its Hold rating with the target price reducing to $11.10 from $12.10.

Sector: Commercial & Professional Services.

Target price is $11.10.Current Price is $10.79. Difference: $0.31 – (brackets indicate current price is over target). If BXB meets the UBS target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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