Brambles shares: Buy, hold or sell?

A leading analyst provides his forecast for Brambles' rebounding share price.

Brambles Ltd (ASX: BXB) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) supply chain logistics company – which counts as the world's largest supplier of reusable wooden pallets and crates – closed yesterday trading for $18.85. In afternoon trade on Wednesday, shares are changing hands for $19.20 apiece, up 1.8%.

For some context, the ASX 200 is up 0.2% at this same time.

Brambles shares have been enjoying a solid run of outperformance in June. Since market close on 3 June, shares have leapt 17.1%.

Despite that strong rebound, shares in the ASX 200 stock remain down 18.3% over the past 12 months, underperforming the 2.9% one-year gains posted by the benchmark index.

Though we shouldn't forget that passive income. Brambles did pay out 64.7 cents a share in partly-franked dividends over this time, which sees the stock trading on a 3.4% partly-franked trailing dividend yield.

Which brings us back to our headline question.

Logistic workers sitting amid pallets and stock in a warehouse.

Image source: Getty Images

Should I buy Brambles shares today?

Bell Potter Securities' Christopher Watt recently ran his slide rule over the ASX 200 stock (courtesy of The Bull).

"Brambles is a supply chain logistics giant," he noted.

Commenting on the company's 18 May trading update, Watt noted:

The underlying franchise remains high quality, but a recent trading update introduced uncertainty around supply constraints, freight costs, plant inefficiencies and softer conditions in parts of Europe, Middle East and Africa.

Summarising his hold recommendation on Brambles shares, Watt concluded:

Management has presented a credible plan to improve capacity through new pallets and service centres, but the financial recovery may take longer than the operational fix. With earnings expectations still at risk, the outlook is balanced.

What's the latest from the ASX 200 stock?

In the trading update Watt mentioned above, Brambles lowered its full-year FY 2026 sales revenue growth guidance to the range of 2% to 3%, down from prior growth guidance of 3% to 4%.

The company also lowered its FY 2026 underlying profit growth to between 3% and 5%, down from prior guidance of 8% to 11% (both at constant FX).

Brambles said the downgrade was mainly driven by the estimated US$60 million earnings impact from repair capacity constraints in parts of its US subcontracted service centre network.

The company also announced a new US$400 million on-market share buyback.

Brambles CEO Graham Chipchase said:

The additional US$400 million share buy-back to be undertaken reflects our confidence in the underlying strength of our business and its ability to deliver sustained free cash flow generation.

Despite the buyback news, Brambles shares still crashed 20.2% on the day the update was released.

Motley Fool contributor Bernd Struben 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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