Breville shares gain as UBS upgrades to 'buy'
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The news: Breville shares advanced in morning trade after UBS upgraded its rating and price target on the kitchen appliances maker.
The numbers: Shares were up 3.5% to $30.83 at 11:10am AEST, extending gains of more than 20% since early April.
UBS upgraded its rating on Breville from 'neutral' to 'buy' and raised its 12-month target price from $33.10 to $35.50.
Breville's share price dropped around 34% between February and April this year as the company warned of slower earnings growth amid new US tariffs on key sourcing countries.
The context: UBS analysts said they expect Breville to more than double its sales over the next decade, following new analysis of the global coffee machines market.
Data from the UBS Evidence Lab supports continued strong growth in Breville's core markets plus an opportunity in new Asian markets, such as China. Breville has a track record of share gains in each geography, the analysts said, and the company is not mature outside of Australia and New Zealand.
Despite a short-term earnings risk due to US tariffs, the analysts see an upside scenario of 30% profit growth by FY35 and a valuation of $46 per share.
The source: UBS research
