The first half result was materially better than Morgans had feared due to stronger contributions from Property and Investments though building products north America (BNPA) was weaker than expected. A 21 cent interim dividend was declared.
Management noted demand has started to recover during March, while price rises have been implemented during February. The company also remains confident in the ability of BNPA to deliver improved future earnings.
Add rating and target price increases to $21.60 from $21.0. The broker highlights cyclical upside in the Buildings products business and significant value is being created in the Industrial Property Trust, with gross rental income to rise 40% by FY23.
Sector: Materials.
Target price is $21.60.Current Price is $19.80. Difference: $1.80 – (brackets indicate current price is over target). If BKW meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
