Investors dwell on Boral’s uncertainties

Investors dwell on Boral’s uncertainties
19 August 2004

Analysts were divided yesterday over Boral’s outlook, but the market seems to be voting with its feet.  The company posted a bumper 2004, and gave an outlook that exceeded a number of analysts’ expectations, resulting in upgrades to 2005 earnings forecasts.  But the stock has slumped 3.7 per cent since to close at $6.98 yesterday.

Perennial Value Management portfolio manager Hugh Giddy said the falls were "a bit mystifying". "It’s classic profit-taking," he said. Investors ran the stock up 30 per cent since mid-May.  The question now is whether it will rally to highs; or are recent falls the start of a new trend as the housing cycle in both the US and Australia turns down? From all perspectives, the 2004 result was very strong.  "I don’t think long-term investors would be saying it’s time to bale out yet," Mr Giddy said.

UBS analyst Mark Ebbinghaus revised his 2005 earnings forecast to A$394 million, slightly ahead of guidance.  Boral’s net profit in 2004 was more than its forecast of A$354 million. "Strong housing activity in Australia and the US helped Boral to report good price, volume and margin increases across the board," he said


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