Despite assessing a a positive quarterly update, Citi lowers forecast profit for FY21-23 by -$5m-$11m, due to a slower-than-previously-expected recovery from closed international borders. Also, lower gross margins from bulk ingredient sales and inventory provisions are expected.
Fourth quarter gross sales declined by -2% relative to the previous corresponding period. The broker considers this a significant improvement compared to the third quarter (-40%), driven by improving momentum in China cross-border e-commerce and corporate daigou.
Citi retains its Sell rating and lowers its target price to $0.33 from $0.35.
Sector: Food, Beverage & Tobacco.
Target price is $0.33.Current Price is $0.45. Difference: ($0.12) – (brackets indicate current price is over target). If BUB meets the Citi target it will return approximately -36% (excluding dividends, fees and charges – negative figures indicate an expected loss).
