As a result of the company’s investor presentation, Credit Suisse notes Australian discounting has returned which has affected margin and profitability. Strong growth continues in Asia and China.
Gross margin expansion is anticipated moving to the high 50% levels from 52%. Credit Suisse downgrades estimates for earnings per share by -2-4% and retains a Neutral rating.
Despite a strong recovery in earnings and a solid balance sheet the broker notes the stock is trading at a 40% PE premium to FY22 estimates. Target is reduced to $77 from $80.
Sector: Household & Personal Products.
Target price is $77.00.Current Price is $70.61. Difference: $6.39 – (brackets indicate current price is over target). If BKL meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
