Why is the CSR share price plunging 9% today?

The broker’s have weighed in with their opinions after CSR’s earnings yesterday.

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Red arrow going down symbolising a falling share price.

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Key points

  • CSR shares are sliding hard in Thursday's session amid a flurry of broker downgrades, despite most coverage staying positive 
  • The company also posted its full-year earnings yesterday leaving investors to digest the results 
  • In the last 12 months, the CSR share price has booked a 15% loss 

Investors are punishing the CSR Limited (ASX: CSR) share price in Thursday’s session having pushed prices 9% lower on the day.

CSR shares are currently swapping hands at $5.20 apiece as downward pressure continues on the company from traders exiting positions en masse.

Volume is also 625% off its 4-week average amid a slew of broker downgrades, despite the majority of analysts still advocating to buy.

CSR share price revised down

Jefferies and Macquarie both levelled off their view of CSR in recent notes, both downgrading the company to neutral.

Analysts at Jefferies reckon there “is a period of capex catch-up ahead” in correspondence to clients and “…forecasts, the prospect of the current pipeline of work falling sharply”.

The broker also mentioned that headwinds in the housing market, such as interest rates and softening prices will also weaken new housing approvals.

It cut CSR to a hold at a $5.90 per share valuation, just behind Macquarie who values the share at $6.05 each.

Analysts at UBS were less pessimistic on the outlook, baking in a strong buy call that’s been retained for some time now by the Swiss investment bank.

Still, these three brokers would be going against the grain, even after the company’s full year earnings release yesterday.

At present, 75% of coverage has CSR as a buy right now, according to Bloomberg data. Whereas the remaining 25% advocate to hold CSR shares.

The consensus price target from this list is $6.35 per share, implying a 22% upside potential should the bull thesis play out.

CSR share price snapshot

In the last 12 months, the CSR share price has booked a 15% loss after extending another 11% into the red this year to date.

In fact, across all major time frames, CSR shares are in the red.


Motley Fool contributor Zach Bristow 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.

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