Josh Wilson, senior portfolio manager and NZ Funds, said there was potential for improved earnings arising from today's changes.
"A pared down and simplified company will allow management to focus on running Fletcher Building's market-leading businesses to their full potential, something that eluded previous management," he said.
"This offers the potential for meaningful earnings upside."
Fletcher Building's valuation sits 25 per cent below its Australasian peers, reflecting the turmoil at the company over the last year.
"With no further construction losses announced and a sensible strategy finally in place, we expect the market to take heart and this gap to close," Wilson said.
Chief executive Ross Taylor indicated earlier this year that job losses would be announced in June but there are no specifics revealed in announcements to the stock exchange this morning.
He told the Herald the business expected to announce lay-offs to trim overheads and said he was deeply disappointed about that prospect.
Taylor said he saw the strategy being delivered over three broad stages.
"In FY19 we will focus on stabilising and turning around our existing businesses, while divesting Formica and Roof Tile Group. By FY20 we should be well positioned to deliver solid performance across the portfolio, and from FY21 onwards we want to be achieving strong revenue and earnings growth year on year," he said.
"With successful implementation of the strategy, we aim to deliver above-market revenue growth and improved operating margins over the medium term."
Fletcher reaffirmed guidance for the current financial, putting earnings before interest and tax at $680m-$720m.
Following the woes at the company's building and interiors unit, chairman Ralph Norris resigned.
The firm will reveal changes to its board tomorrow.
It appointed a number of executives to new positions today, including revealing that Dean Fradgley in the new role of chief executive in Australia. All Fletcher's Australian businesses will now sit within his division.
