Ann: Q2 FY23 Results Pack, page-17

the valuation here makes no sense and consensus numbers next year look ridiculously high, insanely so. the co made clear that over the last 45 days (ie since the analyst day), the business has declined to the point where they took 2H volume guidance from +MSD to -5-8%, for the whole half. How bad does 45 days of demand have to be to take 13pts off all 2H volumes? they also implied that backlog was overstated/illusory, if you parse comments on the call. basically bulls (and the street) are massively asleep at the wheel here. the co is over-earning- 20pts above pre-COVID ROCEs - and has been adding capacity aggressively at the top of the cycle. it is a good company but the end market is simply moving too fast. if earnings fall back to near pre-COVID levels - not aggressive at all given where interest rates are and how much new home construction/R&R demand has been pulled into the last cpl years - then it trades on 30x P/E. that is totally insane, even for a company of this quality. it is well owned by aussie instos and i dont think it gets totally abandoned but consensus numbers for next year, year after are prob 40%, maybe 50% too high. i think this is a mid-teens stock in 6-9mos.