If you are looking to make some new investments, then it could be worth checking out the ASX 200 share in this article.
That's the view of analysts at Goldman Sachs, which have just reiterated their bullish view on the stock.
Which ASX 200 share?
The stock we are going to look at is Breville Group Ltd (ASX: BRG).
Over the past 90 years, Breville has become an iconic global brand that delivers kitchen products to more than 70 countries around the globe. Its brands include Breville, Sage, Kambrook, Baratza, and LELIT.
This week, the company released an update at its annual general meeting. Goldman Sachs was pleased with the update. It said:
BRG noted that positive trends seen in 2H24 has continued through 1H25. Period to date, all three Theatres (US, APAC and Europe) are performing as expected. Logistics costs have picked up but largely offset by reductions in FOB. Distribution segment is continuing to growth Gross Profit. On the whole, business is performing within BRG's FY25 planning parameters.
Goldman also notes that with Donald Trump becoming US president again, there's potential for increased trade tariffs being placed on China made goods. However, the broker isn't concerned by this. It explains:
The company acknowledge that with Trump victory, probability of increased China tariffs has increased. The company highlighted 2 actions until the tariffs are enforced being 1) BRG will continue build inventory in the US until tariffs are enforced and 2) continue to move 120V production out of China, as quickly as possible and company expects to get to 80/20 of this by end 2025 with first incremental SKU live around March 2025.
It also sees potential for the ASX 200 share to pass on additional costs. It adds:
We understand that for BRG's Coffee machines and most other kitchen appliances (oven, microwave, toaster etc) are covered within List 4 of the Section 301 tariffs, which is currently taxed at 0-7.5% and may increase to 5-17.5% i.e. an incremental 5-10% tariff to be levied on the importer. Assuming that the import value is ~50% of the final retail price, we would expect that retail prices will need to be increased by 2.5%-5% to digest the incremental tariff.
Whilst this could have some negative volume impact, we do not see coffee makers as highly price sensitive products (BRG has proven price increases in the past without significant volume impact) and against other industry peers who may also be facing similar inflationary pressures, we do not at this stage see this as a material impact though would need to further clarify with management.
Time to buy
In light of the above, the broker has reaffirmed its buy rating and $34.20 price target.
Based on the current Breville share price of $31.35, this implies potential upside of 9.1% for the ASX 200 share.
