A strategy shift change to focus further on core brands announced by BWX, as the company reduces a number of medium-term targets. In line with the shift, Macquarie notes focus will move away from Europe to focus on the Americas.
The company anticipates sales of $30-50m from Europe in FY23 will be missed, and has stretched its target of $100m in conventional and mass skincare in the US to FY25. In Australia, $50m in skincare supermarket sales is now expected to be exceeded across skin, body and hair.
The broker also notes no major projects or acquisitions are planned in the foreseeable future, with limited capital expenditure as the company address headwinds and works to improve margins.
The Outperform rating is retained and the target price decreases to $2.20 from $2.40.
Sector: Household & Personal Products.
Target price is $2.20.Current Price is $1.42. Difference: $0.78 – (brackets indicate current price is over target). If BWX meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges – negative figures indicate an expected loss).
