Brambles (ASX:BXB) is expected to face a range of near-term challenges, including rising lumber costs and lagging pallet pricing, according to a May 22 report by Jarden Research.
US lumber prices have surged 10.4% year-to-date in the second half of the fiscal year, while pallet pricing remains negative, squeezing unit CHEP Americas' earnings, Jarden said.
The pooling materials company also faces challenges in winning new business and reduced benefits from cost-saving initiatives, Jarden added.
Jaren noted that the company maintained its guidance for full fiscal year revenue growth in the range of 4% to 5% on a constant currency basis and underlying earnings before interest and taxes growth in the range of 8% to 11%.
Jarden maintained Brambles' neutral rating and its AU$19.80 price target.
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