This ASX 200 share in the building industry has been slashed by three brokers.

The CSR Limited (ASX: CSR) share price fell 2.81% on Thursday to close at $5.18. This follows the company’s share price sliding 2.6% on Wednesday on the back of its full-year results.

Let’s take a look at what’s going on with this ASX 200 share.

What’s the outlook?

CSR produces building materials for the construction of residential and commercial buildings. The company also owns a stake in the Tomago aluminium smelter in New South Wales.

Multiple brokers have downgraded their outlook for the CSR share price. Citi has cut CSR to neutral with a $5.45 price target, as my Foolish colleague James reported. This is still 5% higher than the company’s last closing price.

Further, capital market company CLSA has slashed CSR to sell with a $5 price target, while Jefferies has downgraded CSR to underperform with a $4.50 price target, the Australian Financial Review reported. These broker cuts imply downsides of 3.5% and 13% respectively.

The broker cuts follow the release of CSR’s annual results for the full year ended 31 March on Wednesday.

CSR reported statutory net profit after tax fell 19% to $218.5 million. Revenue lifted 13% to $2.6 billion, while group EBIT soared 13% to $329.7 million.

The NPAT before significant items was up 17% on the previous year. The company had a significant items expense of $6.5 million in 2023, whereas in 2022 the company received an $86 million tax boost from capital tax losses in 2022.

The company lifted its final dividend to 20 cents per share, up from 18 cents per share in 2022.

Looking ahead, the company sees challenges for 2024 for its aluminium business. The company said:

While cost volatility and unpredictability in energy and raw materials makes forecasting
challenging, at this early stage in the year, the best estimate for YEM24 is a loss in the
range of -$5 million to -$15 million

Meanwhile, CSR’s building products segment “made a strong start to the year” with a “pipeline of detached housing projects under construction at historically high levels”. Apartment construction activity is also on the rise.

As for its property segment, 2024 will include $44 million in contracted earnings at Horsley Park and a further $58 million in 2025. Major projects at Schofields and Badgerys Creek in NSW and Darra in Queensland are continuing to progress.

CSR share price snapshot

The CSR share price has shed 9% in the last year.

This ASX 200 share has a market capitalisation of about $477.8 million based on the latest closing price.

The post Guess which ASX 200 share has just been downgraded by 3 top brokers appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Appen, CSR, Silver Lake, and Westpac shares are falling
• Top broker tips 7 ASX 200 property-related shares to cash in on the 2023 budget
• 3 ASX 200 building shares that could rise now that house prices have bottomed
• This 8.4% ASX dividend stock is my top pick for immediate income
• If house prices have bottomed, should I buy property-related ASX shares?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/usOTZvN

• Stock Market