The last year has seen modest growth for ASX materials stocks.
The S&P/ASX 200 Materials Index (ASX: XMJ) has risen roughly 5% in that span.
For context, the S&P/ASX 200 Index (ASX: XJO) is up almost 8% in the same period.
However, one ASX materials stock that has flown past the average in the last 12 months has been Wagners Holding Co Ltd (ASX: WGN).
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Why has it exploded in the last year?
Wagners is an Australian construction materials provider.
It produces and sells construction materials through its Composite Fibre Technologies and Earth Friendly Concrete business.
Its segment includes Construction Materials, Project Services, Composite Fibre Technology, and Earth Friendly Concrete.
The stock price rise has possibly come on the back of strong performance in the last financial year.
The company reported impressive growth in FY25, including:
- Operating EBIT $41.8 million (+9% versus FY24)
- Net profit after tax (NPAT) of $22.7 million (versus $10.3 million in FY24)
- Revenue of $431.3 million
Speaking about the previous financial year, Wagners' Managing Director, Cameron Coleman, pointed to growth in two core segments: Construction Materials and Composite Fibre Technologies as contributing factors.
He said these results were driven by strong demand for Wagners' products and services, improved market conditions, and enhanced efficiencies in the company's operating and manufacturing processes, which drove margin improvement.
Can this ASX materials stock keep rising?
The team at Morgans released fresh guidance on this ASX materials stock yesterday.
The broker said, based on the strong outlook for South East Queensland construction markets and the WGN share price, the business has taken the opportunity to raise an additional $30m via an institutional placement, while the Wagner Family has sold an additional $36m of stock to reduce their holding to c.44%.
Despite 14% of share on issue being transacted in the past month (across these transactions), the stock is up c.8.2%. Despite the strong demand signals across South East Queensland (SEQ) and our expectation this can drive earnings higher in FY27/28, a stretched valuation sees us reduce our recommendation to a HOLD with a $2.90/sh price target.
Based on yesterday's closing price of $2.80, the broker sees an upside of approximately 3.5%.
Broker Bell Potter seems to also believe this ASX materials stock is trading close to fair value.
It has a price target of $2.75.
