BIL brambles industries limited

Brambles- likely to make new lows.

  1. 1,816 Posts.
    Brambles is still clearly overvalued.

    Its historic growth has not been as stellar as the brokers brokers ramping this stock as a buy would have you believe.

    Even at current prices (around $7.70), BIL is trading above 20x this years concensus earnings.

    Its pallet business is talked of being competition proof, with very high barriers to entry- this is the claim all the supporters of BIL use to justify its high multiple.

    Why then do the rumours keep flying that LPR is now becoming a serious competitor?

    If BIL was so secure, why has the share price almost halved??

    LPR is clearly a more serious competitor than the major brokers would have you believe. It's a subsidiary of Algeco- a company that is prepared to fund the expansion of LPR's pallet business aggressively.

    BIL's margins will get squeezed, it will lose market share, and earnings will fall as a consequence.

    Do you think BIL will continue trading at above 20x earnings next year when the general market gets evidence of the competition BIL is facing... when earnings growth stalls?


    Lots more downside!

    It's close to making new lows as i speak.
 
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