The Blackmores Limited (ASX: BKL) share price has been a relatively poor performer over the last 12 months.
During this time, the health supplements company’s shares are up almost 3%. This compares to a 25% gain by the S&P/ASX 200 Index (ASX: XJO).
In light of this, investors will no doubt be hoping that a strong full year result in August could be the catalyst to getting Blackmores shares heading higher again.
What is the market expecting from Blackmores in FY 2021?
According to a note out of Goldman Sachs, its analysts are expecting Blackmores to report a 1% increase in revenue in FY 2021 to $573.8 million. This is expected to be driven by double digit sales growth in the China and International divisions, offsetting a 10% decline in ANZ sales to $292.9 million.
Positively, the broker is expecting Blackmores’ earnings growth to be much stronger. Goldman is forecasting earnings before interest and tax (EBIT) to come in 67.4% higher year on year at $52.5 million. Once again, weakness in the ANZ segment is expected to be offset by strong growth in its China and International divisions.
And on the bottom line, the broker is expecting Blackmores to report an underlying FY 2021 net profit after tax of $34.7 million. This is an increase of 118.6% year on year and 6.6% ahead of the market consensus estimate of $32.5 million.
Finally, Goldman Sachs expects this improved performance to allow the Blackmores Board to declare a final fully franked dividend of 42.6 cents per share.
The broker commented: “We expect BKL to report group revenue of A$573.8mn (-0.9% vs. consensus and +1.0% yoy) and EBIT of A$52.5mn (+67.4% yoy) for FY21. For BKL, the key factors to watch for from our perspective are pricing levels, growth in the international markets, progress on market launch in India and indications of foot traffic improvements in Australia.”
Are Blackmores shares good value?
Despite forecasting strong growth, Goldman continues to hold firm with its neutral rating and $74.80 price target.
Based on the latest Blackmores share price of $72.65, this implies potential upside of just under 3%.