Brambles, the world’s largest supplier of reusable wooden pallets, typically leads the markets in which it operates. This leadership is attributed to its scale and first-mover advantage, which limit competition and create a cost advantage, resulting in our wide moat rating. A significant portion of the company’s earnings comes from large beverage and food companies, which we view as defensive, thereby reducing Brambles’ correlation to the economic cycle. Consequently, we project steady revenue growth at a compound annual rate of 6% over the next decade. Additionally, earnings are expected to benefit from improvements in operating margins, driven by the company’s efficiency initiatives in pallet repairs and transportation, as well as the integration of new digital technology.
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