BBN – Morgan Stanley rates the stock as Overweight

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A baby products retailer, Baby and Toddler Town, based in southern New South Wales has gone into administration just eight months after Baby Bunting opened its Shellharbour store 12km away.

While not attributing the closure to the competition, Morgan Stanley believes this is a further data point underscoring Baby Bunting’s scale, range and digital & data advantages in a very fragmented industry.

This reinforces the view that expenditure will gravitate to scale players and Baby Bunting is the category leader.

Overweight maintained. Target is $3.50. Industry view is In-line.

Sector: Retailing.

Target price is $3.50.Current Price is $3.41. Difference: $0.09 – (brackets indicate current price is over target). If BBN meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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