ASX Industrials M&A (and Morgan Stanley’s 3 top sector picks)

LiveWire06-14

On the first of these, CSR (ASX: CSR) shareholders this week approved the $4.3 billion takeover offer proposed by European materials producer Saint-Gobain on 26 February. The deal will see CSR, a ...

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The deal will see CSR, a ...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/asx-industrials-m-a-and-morgan-stanley-s-3-top-sector-picks\">Source Link</a>\n\n</div>\n","source":"livewire_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ASX Industrials M&A (and Morgan Stanley’s 3 top sector picks)</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASX Industrials M&A (and Morgan Stanley’s 3 top sector picks)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-14 10:11 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.livewiremarkets.com/wires/asx-industrials-m-a-and-morgan-stanley-s-3-top-sector-picks><strong>LiveWire</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>On the first of these, CSR (ASX: CSR) shareholders this week approved the $4.3 billion takeover offer proposed by European materials producer Saint-Gobain on 26 February. The deal will see CSR, a ...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/asx-industrials-m-a-and-morgan-stanley-s-3-top-sector-picks\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK7031","symbol_name":"贸易公司与经销商","start_time":0,"source_url":"https://www.livewiremarkets.com/wires/asx-industrials-m-a-and-morgan-stanley-s-3-top-sector-picks","article_id":"2443660183","we_media_id":null,"thumbnails":[],"rights":{"source":"livewire_stock","url":"https://www.livewiremarkets.com/wires/asx-industrials-m-a-and-morgan-stanley-s-3-top-sector-picks","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2443660183","pubTimestamp":1718331093,"sourceInfo":{"source_id":"livewire_stock","name":"Livewire Markets"},"weMediaInfo":null,"summary":"On the first of these, CSR  shareholders this week approved the $4.3 billion takeover offer proposed by European materials producer Saint-Gobain on 26 February. The deal will see CSR, a former sugar refiner that ranks among Australia’s oldest companies, disappear from the local borse after 62 years.Morgan Stanley analysts say the deal represented a:. 13% premium to the last closing price before the deal was announced. 61% premium to MS’s $5.60 price target.“We see limited competition issues,” say MS analysts. “Any transaction would be subject to FIRB review. We note the sale of the sugar business required undertakings to ensure future asbestos claimants were not disadvantaged.”“We see limited meaningful competition challenges for the current proposal given Barro's position on the register and CRH's minimal Australian footprint,” say Morgan Stanley analysts. “On April 12, 2024, BLD and the independent Board committee shifted to recommending accepting a revised bid,” say Morgan Stanley a","collect":0,"end_time":0,"defaultTopTitle":"livewiremarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7031":"贸易公司与经销商","BK4534":"瑞士信贷持仓","LU0971096721.USD":"富达环球金融服务 A","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","BK7064":"综合支持服务","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","CSR.AU":"CSR LTD","SVW.AU":"SEVEN GROUP HOLDINGS LTD","BK7017":"商品化工","BXB.AU":"BRAMBLES LTD","ORA.AU":"ORORA LTD","BK4588":"碎股","QAN.AU":"QANTAS AIRWAYS LIMITED","ABC.AU":"ADBRI LTD","BK7053":"金属与玻璃容器","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","BK4504":"桥水持仓","LU1989772840.SGD":"CPR Invest - Climate Action A2 Acc SGD-H","ORI.AU":"ORICA LTD","BK4581":"高盛持仓","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU1989772923.USD":"CPR Invest - Climate Action A2 Acc USD-H","BK7044":"建筑材料","BK7030":"航空公司","JHX.AU":"JAMES HARDIE INDUSTRIES-CDI","BK4127":"投资银行业与经纪业","BK7129":"钢铁","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU0106831901.USD":"贝莱德世界金融基金A2","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","BK4585":"ETF&股票定投概念","BLD.AU":"BORAL LTD","SGM.AU":"SIMS LTD"},"translate_title":"澳大利亚证券交易所工业并购（以及摩根士丹利的3个顶级行业精选）","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SVW.AU":1,"JHX.AU":1,"ABC.AU":1,"CSR.AU":1,"BXB.AU":1,"BLD.AU":1,"ORA.AU":1,"ORI.AU":1,"QAN.AU":1,"SGM.AU":1},"content_text":"On the first of these, CSR (ASX: CSR) shareholders this week approved the $4.3 billion takeover offer proposed by European materials producer Saint-Gobain on 26 February. The deal will see CSR, a former sugar refiner that ranks among Australia’s oldest companies, disappear from the local borse after 62 years.\nMorgan Stanley analysts say the deal represented a:\n\n13% premium to the last closing price before the deal was announced\n21.5x P/E, 15.9 X EV/EBIT, and 12.1 X EV/EBITDA – based on Morgan Stanley forecasts.\n61% premium to MS’s $5.60 price target.\n\n“We see limited competition issues,” say MS analysts. “Any transaction would be subject to FIRB review. We note the sale of the sugar business required undertakings to ensure future asbestos claimants were not disadvantaged.”\nAdbri (ASX: ABC)\nExisting shareholders Barro Group and Irish building materials firm CRH – which already hold 42.7% and 4.6% ownership stakes in ABC – in December proposed a $2.1 billion takeover of Adbri.\n“We see limited meaningful competition challenges for the current proposal given Barro's position on the register and CRH's minimal Australian footprint,” say Morgan Stanley analysts\n“Unanimously recommended by ABC's independent Board, the offer is subject to shareholder approval, FIRB, Independent expert review and traditional material adverse change and no prescribed condition clauses, and is subject to a A$21 million break fee in certain circumstances.”\nApproval from the FIRB and ACCC are required. “The most significant risk would otherwise be a significant decline in earnings or a potential cost slip at the Kwinana capital project but recent disclosures on both of these provide some comfort,” says Morgan Stanley.\nBoral (ASX: BLD)\nSeven Group Holdings (ASX: SVW) in February proposed a deal, valued at around $1.9 billion, to acquire the remaining BLD shares it doesn’t already own.\n“On April 12, 2024, BLD and the independent Board committee shifted to recommending accepting a revised bid,” say Morgan Stanley analysts.\nThe changes in the bid are:\n1) increase in cash component from $1.50 to $1.70;\n2) a 26 cent fully franked dividend, the dividend will be deducted from bid price but investors can take the franking;\n3) a $350 million buyback to provide increased liquidity which will operate up until May 10, 2024.\nMorgan Stanley’s preferred ASX industrials\nAcknowledging all that, MS analysts emphasise they assess the sector according to the following:\n\nIndustry structure attractiveness\nSurplus asset potential\nBalance sheet strength and capital management potential\nDemand cycle upside potential – “Providing earnings upside and supporting\nmultiple-based valuations. We see Sims Metal (ASX: SGM), James Hardie\n\n\n(ASX: JHX), and Orora (ASX: ORA) as best placed.”\nMultiple versus history – “Favouring stocks trading at attractive multiples\nrelative to history. Qantas (ASX: QAN) and Orora (ASX: ORA) screen best.”\n\n“Favouring strong franchises with attractive industry structures, cyclical upside, earnings support and reasonable valuations. Our key picks are JHX, ORI and BXB.”\nBrambles (ASX: BXB)\n\n\nRating: OVERWEIGHT, from Equal Weight.\n\nPrice target: $16.60, from $15.70\n\n“BXB's valuation now appears more attractive and we see a more favourably balanced risk/reward profile,” say MS analysts.\n“While we are yet to see the inflection point for volumes, when this does occur we will likely see a combination of earnings growth and strong cash flows.”\n“We think BXB has entered into a period where we expect to see earnings growth and improved cash flow performance, which we think could underpin capital management at the FY24 result.\n“While we still view pricing competition as a key risk, the risk reduces as we progress further through the cycle with no evidence of irrational behaviour. We think BXB's current valuation is attractive and supports our more constructive stance.\nMLC Asset Management’s Anthony Golowenko recently named Brambles as one of a few quality local companies that has successfully navigated the environment of higher labour, energy, and transport costs.\nBrambles shares opened at $14.32 on Friday 14 June.\n\n\n\n\n\n\n\n\n\nBrambles 12-month share price (Source: Market Index)\nJames Hardie Industries (ASX: JHX)\n\n\nRating: OVERWEIGHT\n\nPrice target: $58\n\n“JHX's position with its product group in North America is relatively unique and highly\nvaluable. Specifically within the Fibre Cement category, JHX controls >90% of the fibre cement market within North America,” says MS analysts.\nAnalysts rate its balance sheet strength and capital management potential as “four out of five”, adding:\n“JHX offers a strong balance sheet that is likely to support capital management. Net debt at FY24 was US$758m, representing a net leverage ratio of 0.67x. This provides ample headroom to support capital management.”\nTaking a different view on the company, Tribeca Investment Partners’ Jun Bei Liu singled out James Hardie as a high-growth company she believes masquerades as a Quality stock. \n“I will give it to James Hardie, it's a growth company, and it's done very well growing, but a good quality company doesn't keep investors in the dark, especially on bad news,” she said in a recent episode of Livewire’s Buy Hold Sell.\nJames Hardie shares closed at $47.65 on Friday 14 June.\n\n\n\n\n\n\n\n\n\nJames Hardie's 12-month share price (Source: Market Index)\nOrica (ASX: ORI)\n\n\nRating: OVERWEIGHT\n\nPrice target: $21.50\n\nThe global leader in explosives, which is protected by high barriers to entry, MS analysts say ORI “offers favourable industry structures with oligopoly markets in all key regions. It is the only explosives manufacturer with a truly global footprint.”\nMS analysts highlight ORI’s strong positioning across the Porter’s Five Forces analysis:\n\nCompetitive rivalry\nSupplier power\nBuyer power\nThreat of substitution, and\nThreat of new entry.\n\nOn balance sheet strength and capital management potential, MS analysts also rate it a four out of five.\nOrica shares closed at $17.94 on Friday 14 June.\n\n\n\n\n\n\n\n\n\nOrica's 12-month share price (Source: Market Index)\nThis article was originally published on Market Index on Thursday 13 June\n\n\n\nNever miss an update\n\n    Enjoy this wire? Hit the ‘like’ button to let us know. \n    Stay up to date with my current content by \n    following me below and you’ll be notified every time I post a wire","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2443660183"}