FY26 preview: Boral improvement offsets WesTrac FX drag in FY27 (L/MSD EBIT guide likely)

Research evidence excerpt

FY26 preview: Boral improvement offsets WesTrac FX drag in FY27 (L/MSD EBIT guide likely)

Lee Power AC Asia Pacific Equity Research

(61-2) 9003-8725 28 July 2026 J P M O R G A N

lee.power@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

SGH is a conglomerate with a diverse group of businesses

targeting resource production, construction/infrastructure and

energy in Australia, with each business a market leader or

holding a significant market position. Each business has

different macroeconomic drivers, but the geographic and

business mix diversity reduces earnings and cash flow volatility.

The key businesses include: WesTrac - a distributor of CAT

equipment in WA, NSW and the ACT and highly levered to

resource production, which will remain a long-term theme;

YTD 1m 3m 12m Coates - a market leader in equipment hire that is seeing slowing

Abs -5.0% -5.1% 14.1% -15.1% volumes in Victoria, but managing to maintain margins and well

Rel -9.1% -7.6% 10.7% -18.2%

poised for a market recovery; and Boral - a leading building

Company Data materials business that has seen margins increase from 3% to

Shares O/S (mn) 407 14% despite a benign volume environment, and well poised for

52-week range (A$) 52.27-37.26 a housing market recovery. The company also maintains

Market cap ($ mn) 12,555.41

Exchange rate 1.43 meaningful investments in energy assets (30% of BPT and 15%

Free float (%) 48.1% of Crux) that are expected to generate strong free cash flow over

3M ADV (mn) 0.59 the medium term and excess property (largely via Boral) that

3M ADV ($ mn) 17.5

Volatility (90 Day) 29 will see capital released over time. Despite our positive view on

Index ASX 100 the company and quality of management, SGH currently trades