Credit Suisse’s channel check reveals Blackmores gained share in China’s vitamins and supplements market during lockdowns.
The broker estimates that growth may be as high as 20% in the e-commerce channel, with immune health products, CoQ10, glucosamine and fish oil experiencing strong demand.
China represents about 20% to 25% of the company’s sales and just under 25% of earnings, says the broker.
Meanwhile, the broker expects the record flu season should boost sales Down Under. Credit Suisse also suspects Blackmores could be a takeover target given continuing industry consolidation.
Neutral rating and $90 target price retained.
Sector: Household & Personal Products.
Target price is $90.00.Current Price is $70.41. Difference: $19.59 – (brackets indicate current price is over target). If BKL meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).