The Boral share price has been smashed 10% so far in May. What’s happening?

The building products company is facing several headwinds right now.
The post The Boral share price has been smashed 10% so far in May. What’s happening? appeared first on The Motley Fool Australia. –

It’s been a tough month so far for the Boral Limited (ASX: BLD) share price which, at yesterday’s close, had lost 9.52% of its value since 1 May.

However, the building products company has joined in the broader market recovery today and is currently up 1.70%, trading at $3.29. For context, the S&P/ASX 200 Index (ASX: XJO) is up 1.71%.

What’s beating Boral down?

There has been no price-sensitive news out of Boral since its trading update and FY22 guidance on 22 March. However, there is some industry news today.

According to reporting in The Australian, Australia’s largest brick and tile manufacturer, Brickworks Limited (ASX: BKW) is entering the contest for the acquisition of competitor BGC.

BGC is a building materials company worth more than $1 billion and operating exclusively in the West Australian market. It was owned by the late billionaire Len Buckeridge. It’s now for sale through investment bank Macquarie Capital and PwC, according to the report.

Perth-based BGC owns the Midland Brick and Brikmakers brands. The article quotes IBISWorld estimates that the brands have about a 5% share of the country’s overall brick market. The brands were previously owned by Boral.

According to the article:

While the Australian Competition & Consumer Commission would oppose an acquisition by
Brickworks of its business, the thinking is that the $3.4bn Australian-listed group could get
around that opposition by offloading some of its own assets in that market.

The understanding is the family members of Buckeridge … want to sell it in one line to prevent tax leakage. But given the eclectic nature of the company, buyers will form consortiums for an acquisition.

Adbri has indicated an interest in BGC’s downstream assets, thought to be its concrete plants and
quarries, with the ACCC likely to block any deal to buy its cement facilities. The Seven-controlled Boral is expected to take a look, while some believe that Holcim and Heidelberg will form a consortium to bid for the assets with their joint venture Cement Australia included.

Other headwinds for the Boral share price

Boral told the market back in March that poor weather and increased energy costs had put a dampener on its earnings. The company said its sales were lower due to building work being held up by major rain events in New South Wales and Queensland, as well as sharp increases in fuel and coal prices.

What do the experts think?

As fellow Fool Zach reported on 19 April, Boral was a buy at that time for Macquarie and Barrenjoey. It was a hold for Credit Suisse, Morgan Stanley, Jefferies, and JP Morgan. Barclay Pearce said sell.

Bloomberg data had a consensus price target of $3.69 per share at the time. The Boral share price closed the session on 19 April at $3.48.

The post The Boral share price has been smashed 10% so far in May. What’s happening? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Boral right now?

Before you consider Boral, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Boral wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Are these 2 ASX dividend shares buys in May 2022?
4 reasons it could be time to look at the Brickworks share price
Top fund manager reveals 2 undervalued ASX shares to buy
What’s happening to the Boral share price today?
2 ASX shares rated ‘buy’ by this top fund manager

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!