Why the Boral (ASX:BLD) share price is down 17% in a month

The building products and construction materials company has faced a number of recent headwinds.

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The Boral Ltd (ASX: BLD) share price finished the day down 2.17% on Wednesday, at $5.86 per share.

While the building products and construction materials company eked out a 0.7% gain yesterday, the Boral share price remains down 17% over the past month.

Below, we take a look at some of the recent headwinds buffeting the company.

What headwinds has Boral faced recently?

Boral’s share price looks to have come under some pressure with S&P Dow Jones Indices’ pending changes to the S&P/ASX Indices.

That will see Boral exit the ASX 100 Index, replaced by Virgin Money UK (ASX: VUK). While that won’t directly impact retail investors or even many institutional funds, some of the largest fund managers are limited to investing in the ASX 100 pool. This means Boral may now be off their radar.

The changes, part of the September quarterly review, come into effect on 20 September, before the opening bell.

Boral’s share price may also have been negatively impacted by its 2021 financial year results, released on 24 August. The results were largely short of analyst expectations, with revenue from continuing operations decreasing 6% year-on-year to $2.92 billion.

The company also did not declare a final dividend and said that lockdowns will impact its quarterly performance by roughly $50 million.

Going back a few weeks earlier, the Seven Group Holdings Ltd (ASX: SVW) takeover bid rounded off on 29 July.

Seven Group now holds 69.5% of Boral’s shares, giving it majority voting rights. This saw the quick ousting of the company’s previous Board chair Katheryn Fagg, who was replaced by Seven Group’s CEO Ryan Stokes.

Boral share price snapshot

Up until the end of July, the Boral share price was enjoying a strong run. On 26 July the company was trading at multi-year highs of $7.41 per share. You have to go back to 20 April 2018 to find the Boral share price trading any higher than that.

Since that high, shares have retraced 21%.

Year-to-date, the company remains up 18%. That compares to a 12% gain posted by the S&P/ASX 200 Index (ASX: XJO) so far in 2021.

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 Bruce Jackson.

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