Morningstar sees more uncertain future for Australia's Blackmores

Blackmores

05/07/2022 22:54

** Analysts at Morningstar update their uncertainty rating
for Australia's health supplement manufacturer Blackmores Ltd
 BKL.AX  to "high" from "medium"; maintain fair value estimate
at A$85
    ** Morningstar notes that BKL's strong earnings growth is
dependent on offshore markets outside Australia, and says
current industry headwinds including wavering consumer sentiment
and falling number of births in China increase uncertainty and
threaten co's planned targets 
    ** BKL's products are largely seen as discretionary in
nature especially by Chinese consumers and we anticipate
households to adjust discretionary spending habits to combat the
higher inflation and finance costs - Morningstar
    ** Morningstar expects normalisation of global supply chains
to alleviate inflationary pressures in the longer term, but says
uncertainty about the impact to BKL's sales is elevated in the
short term
    ** One of nine analysts rates the stock "buy", four "hold",
and four rate it "sell" or lower; their median PT is A$77.69 -
Refinitiv data
    ** As of last close, stock down 23.2% this year

 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))