UBS observes Fletcher Building’s share price is now sitting in line with pre-covid-19 levels, post some significant earnings upgrades with construction activity in New Zealand noting a rebound post-lockdown along with cost-saving initiatives by the company.
The broker expects construction spend in New Zealand to lift by 12% in 2021-22 with stronger residential and infrastructure activity countered by lower non-residential work. Infrastructure expenditure on projects over $100m is expected to increase by 8% by 2022.
The broker believes Fletcher Building will restart its dividend of 15c in FY21.
Neutral rating is under review with the target rising to NZ$6 from NZ$3.50.
Current Price is $5.53. Target price not assessed.