bubs a buy by citi

even suggested in line for take over. should stop the bleeding.


Bubs a buy, says Citi

Analysts at Citi are big fans of infant milk supplier Bubs Australia, initiating coverage of the stock with a buy rating and price target significantly higher than where it sits today.
“Bubs is a promising brand in the fast-growing goat infant formula category, with well-connected strategic partners and the potential for positive catalysts on the horizon,” Citi told clients in a note titled “Bye Bellamy’s, Buy Bubs”.
Citi certainly expects big gains ahead, slapping a price target of $1.40 on the stock, representing a more than 30 per cent premium to its current level.
Despite the bullish stance, Citi added one caveat, describing its view as “high risk” given the company is early-stage, loss-making and the potential for “execution risk”.
Given recent M&A activity in the sector, including the takeover of rival Bellamy’s from China’s Mengniu Dairy Company, Citi said it has an “implicit takeover premium in its valuation” for Bubs.
BUB shares are down 0.5 per cent at $1.055 today.