Telstra Corporation Ltd (ASX: TLS)

TLS Details

Traded ex-dividend: Telstra witnessed a stock price slump of 6% on August 30, 2017 while the stock traded ex-dividend. Further, the group updated that the proposal to monetise a portion (worth between $5-5.5 billion) of its locked-in recurring nbn receipts, which was announced to the market on 17 August, did not receive technical consents from nbn co. The proposal was basically subject to agreement and a number of steps including approvals and consents from investors, the Commonwealth Government and nbn co. The proposal was well supported by equity and debt investors while nbn co did not approve of it. The nbn recurring payments have been expected to grow to about $1 billion annually by the end of nbn’s migration period. As per the company, proposed transaction showed the significant value in Telstra’s core underlying telecommunications infrastructure. Meanwhile, TLS had announced about their intention to combine Foxtel and Fox SPORTS Australia into a new Company, one that is well positioned to deliver premium sports as well as homegrown, original and international entertainment in a rapidly evolving and competitive marketplace. In this regard, TLS and News Corp will work to finalise the transaction, including obtaining regulatory approval, to be completed in the first half of 2018. Although there are challenges in the near term, the group’s efforts are expected to reap benefits in the long-term. We maintain a “Buy” at the current price of $ 3.60

Boral Ltd (ASX: BLD)

BLD Details

Boral’s stock plunged 2.9% on August 30, 2017. For FY17, the group has reported a 28% increase in underlying profit after tax before significant items to $343 million at the back of strong performance, with all three divisions (Boral Australia, USG Boral and Boral North America) contributing to the improvement. Further, lower net interest expense year-on-year helped boosting the profit. Earnings before interest and tax (EBIT) before significant items also jumped up 16% to $460 million. There was a 2% rise in sales revenue of $4.4 billion over FY16. This included eight weeks of revenue from the Headwaters acquisition and growth in underlying business.
 

Activity in Key markets (Source: Company Reports)
 
As per the outlook, Boral Australia is expected to deliver higher EBIT at the back of infrastructure volume growth driving volume increases. USG Boral earnings are expected to continue to grow owing to strength of Sheetrock® across all markets delivering price, volume and cost benefits. Boral North America is also expected to deliver growth owing to a full year contribution from Headwaters. Looking at the trading scenario, the positives seem to be somewhat factored in the stock which is trading at slightly higher levels.We give an “Expensive” recommendation at the current price of $ 6.63

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