Breville Group Ltd (ASX:BRG) and this ASX growth share have been rated as buys. Here’s why analysts are bullish on them right now…
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If you’re a fan of growth shares like I am, then you’ll be pleased to learn that the Australian share market is home to a good number of them.
But with so many options, it can be hard to decide which ones to choose over others. To narrow things down, I have picked out two growth shares that are highly rated. They are as follows:
Adore Beauty Group Limited (ASX: ABY)
Adore Beauty is a growing online beauty retailer. It was founded in a Melbourne garage by Kate Morris and James Height back in 2000.
Since then, it has evolved into an integrated content, marketing, and ecommerce retail platform in order to better meet customer needs. And what a lot of customers it is meeting the needs of.
At the end of the first half of FY 2021, the company had almost 800,000 active customers. From these, it generated revenue of $96.2 million, up 85% on the prior corresponding period.
Positively, even if you annualise this, it is still only a very small slice of the Australian beauty and personal market worth an estimated ~$11 billion a year. This gives it a very long runway for growth, particularly given the low penetration of online beauty sales compared to other Western markets.
Morgan Stanley is a fan of the company. Last month its analysts reiterated their overweight rating and lifted their price target on its shares to $8.75.
Breville Group Ltd (ASX: BRG)
Another growth share for investors to consider is this appliance manufacturer.
Breville has been growing strongly over the last decade thanks to the increasing popularity of its products and its international expansion. Positively, the latter is continuing and provides it with numerous growth opportunities.
As does the acquisition of Seattle-based coffee grinding company Baratza late last year. This brought together two of the world’s leading companies in the design and global distribution of coffee products.
Like Adore Beauty, Breville was a strong performer in the first half of FY 2021. It delivered a 28.8% increase in revenue to $711 million and a 29.2% increase in net profit after tax to $64.2 million.
The good news is that the second half is expected to be similarly strong. It is forecasting EBIT of $136 million for the full year. This will be a 20% year on year increase.
UBS is bullish on the company due to product launches and its expansion into new markets. Its analysts have a buy rating and $35.70 price target on its shares.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.