Boral's future strategic direction under the new MD (Zlatko Todorcevski) is the key catalyst and Morgan Stanley awaits results of a strategic review, to be unveiled in late October.

Morgan Stanley expects Boral to try and reduce its leverage and with the MD stating raising equity may not be the only way to strengthen the balance sheet, the broker expects asset sales may be the focus.

The broker thinks the company would do well to simplify its operating structure and divest its non-core assets. Moreover, the company needs to reduce its general and administrative costs to be in-line with the industry to unlock any meaningful cost savings.

Equal-weight rating reaffirmed. Target is raised to $4.80 from $4.40. Industry view is Cautious.

Sector: Materials.

Target price is $4.40.Current Price is $4.85. Difference: ($0.45) - (brackets indicate current price is over target). If BLD meets the Morgan Stanley target it will return approximately -10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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