Citi sees bigger FY23 loss for Bubs Australia on lower revenue, higher costs

Bubs Australia

31/01/2023 20:45

** Citi revises its earnings estimates for Bubs Australia
 BUB.AX , reflecting the infant formula maker's lower revenue
and higher-than-expected costs
    ** Brokerage now expects Bubs to post a loss after tax of
A$15.1 mln ($10.66 mln) for FY23, bigger than an earlier
estimate of a loss of A$8.3 mln
    ** Says target price of A$0.32 remains unchanged as lower
earnings are offset by higher peer multiples
    ** Says the brokerage is supportive of BUB's strategies but
need to see more datapoints of improved sales momentum to turn
more positive
    ** Further adds that this may only occur in a meaningful way
from 4Q23 onwards given the timing of China-reopening, ramp up
of BUB's new Manufacturer to Consumer model and U.S.
distribution gains
    ** One of five analysts rate the stock "buy", three "hold"
and one "sell"; their median PT is A$0.35– Refinitiv data
    ** Stock fell 35.8% in 2022
($1 = 1.4170 Australian dollars)
 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))