Blackmores has indicated first half profit is likely to be at similar levels to the prior half, at around $21m. This is below Citi’s original expectations.
Blackmores continues to be affected by e-commerce laws, higher ingredient costs and the Catalent transition. The company expects an improved second half.
One of the main risks to the Sell rating, Citi acknowledges, is the potential for a Chinese partnership or joint venture. This could be perceived as a positive share price catalyst.
A Chinese partner could improve Chinese distribution and tailor marketing and product development. Target is raised to $66 from $63.
Sector: Household & Personal Products.
Target price is $66.00.Current Price is $86.56. Difference: ($20.56) – (brackets indicate current price is over target). If BKL meets the Citi target it will return approximately -31% (excluding dividends, fees and charges – negative figures indicate an expected loss).
