Sydney, May 20, 2026, 02:01 (AEST)
Brambles Limited shares barely moved off the bottom after the close on Tuesday. The pallet group cut its FY26 guidance on Monday due to a repair bottleneck in its U.S. network, erasing about a fifth of its value in just one session. The stock closed at A$17.53, down 0.57% for the day, not far above its 52-week low of A$17.10. Google
Brambles stands out at the moment because it’s part of the ASX20, not a marginal cyclical. The company operates CHEP in roughly 60 countries, renting palettes, containers and crates through over 750 service centres. About 85% of Brambles’ revenue comes from consumer-staples customers, according to Morningstar, so investors have seen it as a relatively steady business.
Brambles shares dropped the most in 24 years on Monday, according to The Australian, after a warning hit a market already on edge over earnings. UBS equity strategist Richard Schellbach said an earnings downgrade cycle was “obviously in motion now.” The S&P/ASX 200 rebounded 1.2% on Tuesday to close near 8,605, making Brambles’ slump stand out as a company move, not just part of an index slide. The Australian
Brambles lowered its FY26 sales revenue growth target to 2%-3%, down from 3%-4%, and also trimmed its underlying profit growth outlook to 3%-5% from 8%-11%, both measures excluding currency shifts. The company said U.S. repair constraints would likely cost around US$60 million in earnings. Brambles also narrowed its free cash flow before dividends forecast to a range of US$1.0 billion to US$1.1 billion.
Brambles ran into trouble in its central and northeast U.S. service centers, unable to fix pallets quickly enough. The company blamed labour shortages, a high churn among subcontractors, tougher repair rules and more customer demand than it expected. Morningstar analyst Esther Holloway said Brambles lost two big subcontractors in April, which made it hard to supply enough pallets.
Chief Executive Graham Chipchase said the company is focused on “restore stability and service” in the U.S. network that’s been hit. “Meeting our customers’ needs is non-negotiable,” Chipchase said. He added that the current issues will “weigh on FY26 and 1H27 financials.”
Holloway called the equity drop overdone. “The sell-down is overdone,” he wrote. Morningstar still expects “the shortage to unwind during 2026.” The firm cut its fair value estimate 8%, now at A$23 a share, and also trimmed its FY26 and FY27 underlying EBIT forecasts by 6% and 5%. EBIT stands for earnings before interest and tax. Morningstar
Broker calls were split. Goldman Sachs lifted Brambles to Neutral from Sell, giving it a A$19.34 price target, MT Newswires reported via MarketScreener. The move followed a five-day drop of 20.79% in the stock. MarketScreener
Brambles’ CHEP, PECO Pallet, and iGPS Logistics keep turning up on industry lists of big pallet-pooling and rental firms, but the real contest is on service more than price. Pallet supply in the U.S. could shift if customers decide to look elsewhere as Brambles tackles its repair backlog, according to Mordor Intelligence.
Brambles’ recovery is looking uneven. If labour stays in short supply, subcontractor capacity doesn’t improve, and transport or fuel costs don’t ease, the US$60 million impact flagged for FY26 might last longer. There’s also a risk if customers move volumes while supply is tight. The company said the final outcome hinges on demand, foreign exchange, supply-chain efficiency, and costs for lumber and other key inputs, as well as macro and geopolitical factors.
Brambles stepped in with capital returns. The current US$400 million buyback is still running, and the company has bought about US$370 million of its own shares so far. Brambles also said it will launch another US$400 million buyback after this one.
Brambles’ next major update comes with FY26 results on Aug. 20, where the company said it will give investors more on U.S. repair progress. In the meantime, the stock will probably move on whether pallet supply is showing signs of recovery, and if the slight dip Tuesday after Monday’s steep drop is a sign of a bottom, or only a short break.
