Morgans suspects that second half trading has stayed subdued, although rising e-commerce platform prices are a positive sign. The broker also notices increased shelf space from some competitors while Bellamy’s Australia has a less favourable position in some stores.
The broker revises forecasts to the lower end of guidance. Brand refresh and ingredient upgrades are critical elements of the company’s strategy and are expected to underpin earnings growth in future years, yet Morgans awaits the SAMR approval for the organic range before reviewing the rating.
Hold rating maintained. Target is reduced to $7.95 from $8.85.
Sector: Food, Beverage & Tobacco.
Target price is $7.95.Current Price is $8.42. Difference: ($0.47) – (brackets indicate current price is over target). If BAL meets the Morgans target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
