Fletcher Building: Trading update: Recovery continues, but risks linger

Research evidence excerpt

Fletcher Building: Trading update: Recovery continues, but risks linger

J P M O R G A N Asia Pacific Equity Research

17 June 2026

Fletcher Building Underweight

FBU.NZ, FBU NZ

Trading update: Recovery continues, but risks linger Price (17 Jun 26):NZ$3.22

Price Target (Jun-27):NZ$2.80

We retain our Underweight rating on FBU following today’s (Wednesday’s) Australia

update in which management guided FY26 EBIT to NZ$375-380m (ex.

Australia Industrials

discontinued operations, incl. ~$40m of property earnings). While management

has done a great job managing the business through trying times (and the market Lee Power AC

has avoided widespread demand destruction), we believe that ex-property, the (61-2) 9003-8725

lee.power@jpmorgan.com

guidance falls in line with consensus estimates. While housing has bottomed, we

Dylan Adrian

think NZIER survey data through the March quarter points to downside (or, more (61-2) 9003-7397

likely, timing) risk around the pace of recovery. Management confirmed that dylan.adrian@jpmorgan.com

existing construction projects continue to progress, though commercial activity is Nick Torelli

showing early signs of softening. Balance sheet repair is welcome, with net debt (61-4) 6817-5219

forecast to finish FY26 marginally above the midpoint of the $400-900m target nick.torelli@jpmorgan.com

range. Our PT remains unchanged at NZ$2.80. While we are constructive on J.P. Morgan Securities Australia Limited

FBU’s medium-term story, on a 12-month view we continue to prefer JHX (OW)

followed by RWC (OW) within our Building Materials coverage. Key Changes (FYE Jun)

• Guidance solid, flattered by property gains: FY26 EBIT guidance of $375- Adj. EBITDA - 26E (NZ$ mn) Prev653 Cur709 8.7%Δ

380m (ex. discontinued operations, incl.~$40m of property earnings) implies