Brambles Ltd (ASX: BXB) shares have gone from market favourite to one of the ASX's hardest-hit blue chips in just a few weeks.
The pallet giant finished Thursday down 2.53% to $16.55, leaving the stock down around 25% over the past month and almost 28% over the past year.
It also hit a fresh multi-year low during Thursday's session before clawing back some of those losses by the close.
Losing a quarter of its value in just a few weeks is not what investors usually expect from a blue-chip name like this.
This isn't a speculative small cap either. It's a global supply chain business with a large recurring customer base and a market capitalisation above $22 billion.
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Why investors lost patience
The sell-off really started after Brambles cut its FY26 outlook earlier this month.
The company is now expecting sales revenue growth of 2% to 3% at constant currency. That's down from its previous forecast of 3% to 4%.
Brambles also now expects underlying profit growth of 3% to 5%, compared with earlier guidance of 8% to 11%.
The company said subcontractor turnover, labour shortages, and extra repair work have all added pressure. Brambles has been lifting pallet repair standards to meet customer needs, but the extra work has slowed parts of the network and pushed costs higher.
Management expects the US repair issue to reduce FY26 earnings by about US$60 million.
Around US$40 million of that is tied to extra supply chain costs, including repair, handling, transport, and storage.
Why confidence is still shaky
Brambles told investors the repair bottleneck should be fixed by the first half of FY27.
To get there, it's shifting pallets between locations, adding repair capacity, and buying around 2 million new pallets in the fourth quarter of FY26. More pallet purchases are expected early in FY27.
The company has also announced a US$400 million on-market share buyback.
A buyback of that size would usually give investors something to lean on, especially from a business with strong cash flow. But investors are looking past that at the moment.
Nonetheless, broker views show how divided the market has become.
Morgans downgraded Brambles to hold and cut its price target to $18.70. Macquarie also lowered its target to $18.60, with concerns around customer outcomes and the cost of fixing the US network.
Citi has taken a more positive view, reportedly keeping a buy rating and a much higher $27.55 price target.
Has the damage gone too far?
Despite the setbacks, there's still a case for owning Brambles.
The company remains the world's largest reusable pallet and container pooling business. It also has deep exposure to consumer staples supply chains, where demand is usually more resilient than in many other parts of the economy.
Its network would be hard for a rival to copy, and the business still has a large base of recurring revenue.
But after a fall like this, investors are going to want more than a cheap-looking share price.
Thursday's low of $16.25 may now be the level traders watch after the stock bounced from there.
If Brambles falls below that level again, it could suggest sellers are still in control.
