Brambles shares: what’s the outlook as Q1 sales revenue hits $1.16B?
The outlook for Brambles remains on-track, with the company’s CEO today reiterating previously stated FY20 guidance.
Morning price action
Brambles (ASX: BXB) – the A$17 billion large-cap, today provided the market with its FY20 first quarter trading update.
The market responded with decisive bullishness to the Q1 update, bidding the Brambles share price some 3.27% higher in the first hour of trade, to as high as A$11.37 per share.
Brambles Q1 results at a glance
Brambles saw modest top-line growth during the first quarter of 2020, with the company reporting particularly good growth in its CHEP Americas segment.
From continuing operations Brambles reported revenue figures of $1,159 million – a favourable increase on the prior corresponding quarter’s $1,139 million. At constant FX rates this represent a 5% increase, while on actual FX rates it is a more mild 2% increase.
As noted above, the CHEP Americas segment was the best performing for the group during Q1, seeing its sales revenue increase 7%, at constant FX rates.
This, as pointed out by the company, reflected ‘higher price realisation across the region, particularly in Latin America, rollover benefits from US pallet contracts won in the prior year and solid like-for-like volume growth in the US and Latin America.’
In comparison, CHEP EMEA and CHEP Asia-Pacific sales revenue came in slightly lower, increasing 4% and 2%, respectively, at constant FX rates.
Speaking of these results, Brambles’s CEO, Graham Chipchase commented that, ‘our first-quarter sales performance reflects pricing discipline and ongoing volume momentum despite increasing macroeconomic uncertainty in our major markets.’
FY20 guidance remains unchanged
Pleasantly, Brambles also took today’s Q1 trading update to reiterate the company’s FY20 guidance, with Mr Chipchase noting that the prior guidance outlined during the Brambles’s FY19 results remains unaltered.
Specifically, it was pointed out that:
‘On a constant-FX basis, we continue to expect sales revenue growth to be at the lower end of our mid-single digit objective and Underlying Profit to be in line with, or slightly above sales revenue growth, including the impact of the new leasing standard, AASB 16.’
Brambles share price: analyst expectations
According to Bloomberg Data, analysts currently have 1 buy recommendation, 8 hold recommendations and 2 sell recommendations on Brambles. Such views have evidently not stopped investors running Brambles higher today.
Year-to-date, the Brambles (ASX: BXB) share price has now risen a little more than 12%; lagging the ASX 200 only somewhat.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.