Continuing strong demand for household goods, and recent positive sales results from competitors, are supportive of a solid first half sales result from Breville Group according to Credit Suisse.
The broker notes supply constraints, and associated elevated costs, continue to present risk and Credit Suisse updates full year earnings to account for expected margin compression.
Looking ahead, the company plans to mitigate supply chain issues through inventory build in the second half, ahead of its peak sales period in FY23. The company is also set to expand into Italy and Mexico in the coming half.
The Neutral rating is retained and the target price decreases to $29.86 from $30.98.
Sector: Retailing.
Target price is $29.86.Current Price is $28.86. Difference: $1.00 – (brackets indicate current price is over target). If BRG meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
