Australia's Blackmores: MS says equity raise to de-risk balance sheet, hikes PT

Health and Happiness (H&H) International Holdings

28/05/2020 03:46

(Recasts with Morgan Stanley comments)
    ** Brokerage Morgan Stanley hikes PT on vitamin maker
 BKL.AX  to A$67.00 from A$66.0; maintains "equal-weight" rating
    ** Views Blackmore's equity raising as an opportunistic move
that will de-risk and shore up its balance sheet
    ** Blackmores on Wednesday announced a placement of A$92
mln($60.91 mln), along with a share purchase plan of up to ~A$25
mln($16.55 mln) urn:newsml:reuters.com:*:nL4N2D946V
    ** Co's recent acquisition of Braeside manufacturing
facility stretched its balance sheet and increased operating
leverage during COVID-19 disruption - MS
    ** Citi Research says BKL on Wednesday earmarked some
proceeds to accelerate investment in Asia and strengthen its
balance sheet, while China remained a key focus
    ** "While we view the Indian opportunity as potentially
significant longer term, it is unlikely to move the dial in the
short term" - Citi
    ** MS also notes BKL's lenders have increased debt covenant
thresholds through to June 2021
    ** However, brokerage does not view balance sheet concerns
as a major overhang, given recent share price performance
    ** One of 10 analysts rate the stock "buy", five "hold" and
four "sell" or lower; their median PT is A$72.8 – Refinitiv data

 (Reporting by R.R.Deepti Sri and Arpit Nayak in Bengaluru)
 ((Arpit.Nayak@thomsonreuters.com; +91  80 6182 3472;))