Why has Fletcher Building (ASX: FBU) popped ~7%?
Fletcher Building (FBU) surged ~7% on a soft day for the ASX after upgrading FY26 EBIT guidance to NZD $400m–$403m (inclusive of ~NZD $52m from surplus property sales), a ~6.4% increase from prior guidance. Excluding property sales, continuing operations EBIT is guided to NZD $348m–$351m, approximately 3.6% above the midpoint of their mid-June guidance range.
Despite the upgrade, management struck a cautious tone on the outlook. saying Macro uncertainty and persistent cost inflation are delaying projects and weighing on customer demand, with both expected to pressure 1H FY27 earnings. Management also noted recent volume improvements in its core manufacturing and distribution businesses were partly driven by temporary market conditions.
We’ve been monitoring the Building Products stocks closely of late having recently switched from James Hardie (JHX) into Reece (REH), selling out of a company that has disappointed many into a recent strength while staying long the building sector that’s finally gaining support.
- We like FBU following the upgrade initially targeting the $3.40 area, or ~15% higher.
