Key points
- Bubs delivered a better than expected second quarter update this week
- Bell Potter and Citi were pleased with its performance
- Both brokers now have high risk buy ratings on its shares
The Bubs Australia Ltd (ASX: BUB) share price is out of form on Tuesday.
In morning trade, the infant formula company’s shares are down 1% to 46.5 cents.
This is despite a couple of brokers responding positively to Bubs’ second quarter update.
What are brokers saying about the Bubs share price?
According to notes out of Bell Potter and Citi, their analysts see value in the Bubs share price at the current level.
This morning Bell Potter retained its speculative buy rating and lifted its price target by 7.7% to 70 cents. Based on the current Bubs share price, this implies potential upside of 50% for investors over the next 12 months.
Bell Potter commented: “BUB delivered another strong quarter of growth in 2Q22, which again has been driven in large by the infant nutrition business. Improving secular trade flows to China, continued signs of brand traction and the potential for BUB to benefit in indirect distribution channels as A2M shifts focus to direct China channels, are supportive of our Buy, Speculative risk rating.”
Whereas Citi has upgraded Bubs’ shares to a high risk buy rating and lifted its price target by 7.9% to 68 cents. This implies potential upside of 46% over the next 12 months.
Citi believes the improvement in the daigou channel could be a sign of an inflection point being reached after significant weakness over the last couple of years. It also believes “there is scope for further, albeit likely gradual, improvement as borders re-open.”
Time will tell whether this is a false start or the beginning of the good times.
The post What are brokers saying about the Bubs (ASX:BUB) share price? appeared first on The Motley Fool Australia.
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More reading
- 2 fast-growth ASX shares with major plans
- Why Airtasker, ARB, Bubs, and Sezzle shares are pushing higher
- Bubs (ASX:BUB) share price jumps 14% amid strong daigou-fuelled Q2 growth
- 2 ASX shares that could soar in 2022: experts
- Can the Bubs (ASX:BUB) share price bounce back in 2022?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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