Brambles Limited: Cut estimates & PO post trading update; Remain Neutral

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Brambles Limited: Cut estimates & PO post trading update; Remain Neutral

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Brambles Limited

Cut estimates & PO post trading update;

Remain Neutral

Reiterate Rating: NEUTRAL | PO: 21.10 AUD | Price: 17.83 AUD

Negative trading update; Cut estimates & PO 18 May 2026

Brambles (BXB) announced a trading update this morning. BXB has revised down their FY26 Equity

sales revenue growth to 2-3% (prior: 3-4%) and underlying profit growth to 3-5% (prior: 8-

11%) which is expected to have a US$60mn earnings impact ($40mn from incremental

Key Changessupply costs, $20mn from customer mix/volume constraints). BXB also announced an

additional $400mn buyback to commence after the current $400mn buyback is completed (US$) Previous Current

(currently $370mn completed). We trim our FY26E EBIT to $1,459mn (prior: $1,570mn, VA: Price Obj. A$24.85 A$21.10

$1,561mn). We also trim FY27E EBIT by 6%. We reduce our PO to $21.10 (prior: $24.85) on 2026E Rev (m) 7,059.4 7,026.5

lower estimates as well as a lower target P/E multiple (now 22.0x vs 27.0x prior to reflect a 2027E Rev (m) 7,412.3 7,370.1

lower margin profile). Our conversations with investors today suggest disappointment in 2028E Rev (m) 7,772.6 7,728.1

that BXB did not host a broader trading update call (it hosted only a sell-side call). 2026E EPS 0.74 0.68

2027E EPS 0.80 0.75

2028E EPS 0.87 0.84Short-term supply constraints; subcontractor reliance

Key points: 1) Short-term repair capacity constraints: Driven by subcontractor turnover,

labour availability and the additional time for pallet repair. This is prevalent in the US North- Shaurya Visen >>

Research Analyst

East and Central regions, with new business signups unaffected in other regions. BXB Merrill Lynch (Australia)