Down 10% in a month, could Boral shares be a buy?

Some are still constructive on the construction player’s shares.

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Key points

  • Boral shares have been punished these last few weeks as market volatility creeps in
  • Despite this, the company could still be a buy one broker says, valuing its shares at around 54% return potential
  • The Boral share price has collapsed 64% into the red over these past 12 months of trade

The Boral Ltd (ASX: BLD) share price is on the rise on Monday. At the time of writing, Boral shares are trading 2.33% higher at $2.63 apiece on no news.

Boral had a choppy month on the charts in June and traded 10% down in that time. This came as commodity market volatility weighed on the company’s performance, among others.

In broader market moves this morning, the S&P/ASX 200 Materials Index (ASX: XMJ) has climbed 0.32% at the time of writing after also tumbling lower in June.

Returns for both Boral and its home sector since March are plotted below:

TradingView Chart

Is the Boral share price a buy?

The Boral share price has been on the downtrend for some time. It’s fallen from a high of $3.58 on 28 April and has glided lower since.

Early in June, it was the surging price of oil that was pinching gains from the company’s shares. At the time, Boral chair Ryan Stokes noted the company wasn’t immune to rising energy costs.

Also last month, the company announced Vik Bansal as its new CEO and managing director.

The former head of waste management giant Cleanaway and current head of InfraBuild, Bansal’s new position becomes effective on 5 December 2022.

Nevertheless, analysts at Macquarie reckon there could be an opportunity in Boral. They’ve baked considerable upside in their valuation of the company.

They’ve rated Boral a buy with a valuation of $4.05 a share. That’s around 54% potential return on the current share price.

Despite pressures from a cooling house market, rising input costs, and industry risks, the Macquarie team also says there could be “alternative growth potential” and are constructive on Boral’s “infrastructure exposure”.

That kind of upside is welcome news for the Boral share price. Over the past 12 months, the company’s shares have collapsed 64% into 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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