Boral Ltd Share Price Climbs 3.8% on Budget News

Boral Ltd [ASX:BLD] climbed 3.8% this morning to a high of $6.74 per share.

What happened to ASX:BLD?

The government announced its much-anticipated budget last night. While banks were hit with a 0.06% tax levy, it was a different story for infrastructure.

As reported by the Australian Financial Review:

Large infrastructure spending — including the funding and construction of a new Sydney airport and $10 billion for inland rail — were outlined in the budget.

Companies like CIMIC and Landlease are well poised to bid for some of the work. Meanwhile companies like Adelaide Brighton and Boral are also well placed, as they supply materials to such projects.

The infrastructure spending is expected to help ease boost the economy through the end of the housing construction boom, but it could provide some steady returns for investors too.

The future for the Boral Ltd share price?

If you’re looking for a growth company, Boral probably isn’t the stock for you. Analysts are expecting earnings per share (EPS) to rise in the future, but not by next year.

Analysts expect EPS for FY17 to drop to 25 cents, a 21.8% decline from FY16. In FY18 and FY19, EPS could grow to 39 cent and 43 cents respectively.

This data alone doesn’t warrant an investment in Boral.

Either way, the potential billions set to be spent on infrastructure in the future should be a major boost to the construction sector.


Härje Ronngard,

Junior Analyst, Money Morning

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