Morgans notes investor confidence may take some time to rebuild after a downward guidance revision to FY21 prospectus forecasts. This was driven by higher promotional spend and covid-19 impacts on the B2B channel. The target is lowered to $1.13 from $1.59.
The covid impacts included petrol and convenience customers maintaining ‘minimal stocking levels’ and negligible sales to gyms/corporate customers. The analyst maintains an Add rating, given the recent share price fall.
Although net revenue guidance fell 1-3% and earnings (EBITDA) guidance to $1-2m from $2.9m, B2C delivered solid metrics, according to the broker. Lower value is attributed to B2B revenues versus the core B2C segment, given B2B is a lower margin segment.
Target price is $1.13.Current Price is $0.60. Difference: $0.53 – (brackets indicate current price is over target). If YFZ meets the Morgans target it will return approximately 47% (excluding dividends, fees and charges – negative figures indicate an expected loss).
