BIG RIVER INDUSTRIES LIMITED (BRI)
Share Price Analysis and Chart

01/05/2024

1

Buy

$1.91

28.19%

Big River Industries has released a weak March Q trading update, Ord Minnett notes.

While the third quarter is a seasonally a weaker period, results were impacted by persistent delays and associated negative fixed cost leverage, further compounded by additional gross margin pressure.

The broker expects these conditions to persist in the short-term, with FY24-25 earnings forecasts implying a cyclical low. Thereafter Ord Minnett believes the medium-to-longer term pipeline continues to strengthen, buoyed by a chronic housing underbuild and elevated
migration.

Target falls to $1.91 from $2.39, Buy retained.

FORECAST
Ord Minnett forecasts a full year FY24 dividend of 6.60 cents and EPS of 9.90 cents.
Ord Minnett forecasts a full year FY25 dividend of 8.30 cents and EPS of 12.10 cents.

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10/05/2024

1

Buy

$2.00

34.23%

While not issuing FY24 guidance, management at Big River Industries has noted current trading conditions are challenging and likely to persist into Q4.

The broker points out residential housing exposure continues to weigh on the company's stock price. Margin compression from softer revenues is being partially offset by the inclusion in the analysts' forecasts of the recently acquired Specialised Laminators, Queensland.

For the medium-term, the company noted underlying demand is supported by a solid commercial project pipeline, as well as an eventual uplift in housing starts to address the housing supply deficit.

The broker's Buy rating is retained given the business is trading at a significant discount to peer valuations. The target is reduced to $2.00 from $2.29.

FORECAST
Moelis forecasts a full year FY24 dividend of 6.50 cents and EPS of 9.80 cents.
Moelis forecasts a full year FY25 dividend of 7.10 cents and EPS of 11.80 cents.