Morningstar | Australian Infrastructure Spend To Deliver Top-Line Support For Adelaide Brighton; Shares Attractive
The Australian cement industry is transitioning toward lower domestic clinker manufacture in favour of greater Asian imports which reduce both cost and local industry carbon emissions. Adelaide Brighton is furthest along this journey with an approximate 60% of clinker requirements being sourced offshore. While increased imports act to reduce raw materials costs, operating leverage is expected to be more muted as this transition continues. While we expect the company to pass through higher energy costs to customers, driving operating margins to 15% at midcycle--near historical averages--we see further margin accretion constrained. Following an approximate 40% share price decline since August 2018, Adelaide Brighton has begun to look appealing, trading at 14% discount to our fair value estimate.Adelaide Brighton is an integrated construction materials and industrial lime producer which supplies a range of products into building, construction, infrastructure and mineral processing markets throughout Australia. Co.'s principal activities include the production, importation, distribution and marketing of clinker, cement, industrial lime, premixed concrete, construction aggregates and concrete products. In addition to domestic production, Co. is the importer of cement, clinker and slag into Australia.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.