ASX:BXB

Goldman Sachs Upgrades Brambles to Neutral from Sell; Price Target is AU$19.34

Australian Shares Decline; Santos Achieves First Oil from Alaska Project

Australian shares declined on Monday as ⁠oil prices rose and the Strait of Hormuz remained closed.The S&P/ASX 200 Index fell 1.45%, or 125.50 points, to close at 8,505.30.Brent crude oil futures climbed to above $110 per barrel. The 30-year US Treasury yield rose to the highest point since 2023.On the domestic front, the Reserve Bank of Australia said Project Acacia, a research project led by the RBA and the Digital Finance Cooperative Research Center (DFCRC), revealed considerable industry interest in tokenization and showed potential to materially improve the efficiency and functioning of Australia's wholesale asset markets.In company news, Santos (ASX:STO) achieved first oil from the Pikka phase one development in Alaska. The phase one initiated production was part of the start-up and late-stage commissioning process, and it is expected to lead to an initial ramp-up to gross 20,000 barrels of oil per day over the next few weeks. Its shares rose 3% on market close.Tuas (ASX:TUA) said the Infocomm Media Development Authority of Singapore paused the review of the proposed acquisition of Singaporean telecommunications firm M1 by its Simba Telecom subsidiary. Its shares closed down 63%.Lastly, Brambles (ASX:BXB) lowered its forecast fiscal-year ­sales revenue growth to 2% to 3% from the previous 3% to 4% and underlying profit growth to 3% to 5% from 8% to 11%, reflecting about $60 million in earnings impact due to repair capacity constraints in parts of its US subcontracted service center network. Its shares fell 20% on market close.

Brambles Lowers Fiscal Sales Revenue Growth Guidance; Shares Hit Near Two-Year Low

Brambles (ASX:BXB) lowered its forecast fiscal-year ­sales revenue growth to 2% to 3% from the previous 3% to 4% and underlying profit growth to 3% to 5% from 8% to 11%, reflecting about $60 million in earnings impact due to repair capacity constraints in parts of its US subcontracted service center network, according to a Monday filing with the Australian bourse.The company also revised its­ free cash flow before dividends guidance to be between $1 billion and $1.1 billion from $950 million to $1.1 billion, the filing said.Shares fell nearly 18% in morning trade on Monday and earlier hit their lowest since August 2024.

Brambles to Face Temporary Cost Pressure From Higher Fuel Expenses, Jefferies Says

Brambles (ASX:BXB) is expected to see a modest near-term earnings headwind from rising transport and diesel costs, though impacts should be temporary and largely offset over time, Jefferies said in a Thursday note.Jefferies noted that the company's exposure to Middle East operations remains minimal, with CHEP's activity in Saudi Arabia and the United Arab Emirates accounting for fewer than 600,000 pallet issues annually, and it sees no material disruption to pallet flows from regional geopolitical tensions.The equity research firm said elevated transport costs in North America are pressuring the company's margins in the near term due to higher fuel costs and a lag in passing them through, despite fuel recovery mechanisms in many contracts.The research firm highlighted that planned overhead savings could be brought forward to ease fiscal second-half cost pressures, while lower diesel prices later may offset any cost timing shifts into fiscal year 2027, leading the market to likely overlook these fluctuations.The research firm added that despite near-term dynamics, the company's guidance remained unchanged, with expected revenue growth of 3% to 4%, earnings before interest and taxes growth of 8% to 11%, and free cash flow of $950 million to $1.05 billion.Jefferies maintained a hold rating on Brambles and lowered the price target to AU$21.02 from AU$21.40.

Brambles Says Court Returned Mixed Verdict in Class Action Over Guidance Disclosures

Brambles (ASX:BXB) said Australia's Federal Court on April 10 dismissed several claims and upheld others in a class action filed by certain shareholders who alleged the company made misleading guidance disclosures to the market between August 2016 and February 2017, according to a Monday filing with the Australian bourse.The court dismissed all claims related to medium-term targets for fiscal 2019, and also dismissed several claims related to Brambles' fiscal 2017 guidance, per the filing.However, in relation to the fiscal 2017 guidance, the court upheld claims related to underlying profit growth forecasts made between Nov. 16, 2016, and Dec. 21, 2016, as well as the claims related to underlying profit growth and sales revenue growth targets issued between Dec. 21, 2016, and Jan. 23, 2017.Brambles, which has insurance arrangements in place, is reviewing the decision and evaluating its options. The company said the amount of potential damages is currently uncertain.Shares of Brambles were down 1% in recent Monday trading.