Citi bearish on Australia's Blackmores on revenue headwinds for antipodean operations

Blackmores

21/07/2021 24:55

** Citi has a price target of A$55.50 on health supplements
maker Blackmores  BKL.AX  with a 'sell' rating 
    ** Expects BKL's Australia-New Zealand operations - biggest
revenue generator - to continue to underperform over the short
to medium term
    ** ANZ operations generated 40% of BKL's FY20 https://www.blackmores.com.au/-/media/files/investor-centre/annual-and-half-yearly-reports/blackmores-group-annual-report-2020-final2.pdf?la=en&hash=4954CEFE1991CD2BB43DE85D34EA19BE78B5CC09
 revenue of A$568.4 mln ($416.64 mln)
    ** Citi sees 2H21 net sales of A$279 mln, 8% lower than 1H21
net sales of A$303 mln
    ** ANZ sales in 2H21 expected to drop 8% from a year ago to
A$142 mln
    ** Citi sees headwinds for the pharmacy sector due to
slower-than-expected vaccination, increased competition, lack of
students and tourists, supply chain pressures
    ** Sees out-of-stock products impacting revenue growth in
ANZ, and "potentially an indication of supply chain or
manufacturing issues" BKL could be facing
    ** Two of 10 analysts rate the stock "buy" or higher, seven
"hold" and one "strong sell"; their median PT is A$77.00 –
Refinitiv data
    
($1 = 1.3643 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com;))