Is the Breville share price out of the bargain bin?

The Breville share price is down 40% in 2022 — but has gone up 5% in the past five trading days. Is a turnaround afoot?

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Key points

  • The Breville share price has lost more than 40% of its value in 2022 so far
  • But over the past five days, Breville shares have rebounded by 5%
  • Several top brokers have buy or add ratings on the appliance and white goods business 

The Breville Group Ltd (ASX: BRG) share price has lost more than 40% of its value in 2022 so far. That compares with a 12% loss in the benchmark S&P/ASX 200 Index (ASX: XJO).

But over the past five days, the market has picked up. The ASX 200 is up 2.76% and Breville is up 5.02%. Which begs the question as to whether a turnaround is afoot for this iconic white goods business.

No one — not even the experts — can predict the top or bottom of a market cycle. No doubt, we’re in a market correction now, and when it will end is anyone’s guess.

At a minimum, you’d have to think that people will need to get comfortable with rising inflation and interest rates before the market settles.

But what we do know is that many high-quality, established businesses are trading on the ASX at substantial discounts today. And at a 40% loss, you’d have to count Breville shares among them.

What the experts think…

As my Fool colleague James reported last week, Morgan Stanley has retained its overweight rating on Breville but has cut its share price target to $25.

Morgans has an add rating and a share price target of $32. In a recent note, the broker said:

In our opinion, BRG deserves to trade at a premium multiple. It is positioned to deliver double-digit sales growth consistently over the next few years as it grows its market share, notably in geographies into which it has recently launched. Our rating remains ADD.

Goldman is also positive on the Breville share price. The broker names it among eight other ASX 200 shares that are trading “at significant discounts” today.

Breville is 90 years old but still growing

Breville has big international expansion plans underway, as outlined in a recent investor presentation.

Breville reckons it has “a long way to go” with “large, untapped opportunity” worldwide. In FY22, Breville opened in Norway, Finland, Denmark, and Sweden. It was due to open in South Korea this month and is opening in Poland next month.

After that, the business is headed to Germany, Austria, Switzerland, Spain, Portugal, France, Mexico, and Italy. Breville’s 100% acquisition of Italian coffee group LELIT is expected on Friday. Breville is paying 113 million euros for the company.

Maybe not out of the bargain bin yet?

Today isn’t turning out to be such a good day for the Breville share price. It’s down 4.21% to $18.43 while the ASX 200 is down 0.74% at the time of writing. So, perhaps it remains in the bargain bin for now.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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 Scott Phillips.

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