• Brokers see lofty target prices for Blackstone Minerals and Baby Bunting
  • Blackstone Minerals is a Speculative Buy, with nickel project in Vietnam key to its success
  • Baby Bunting held its market share post-Covid, share price could rise significantly says broker


Blackstone Minerals is a Speculative Buy

Broker Euroz Hartleys has a Speculative Buy recommendation on Blackstone Minerals (ASX:BSX), with a target price of 50c (vs the current pice of 15c).

The broker said it recently attended a site visit to Blackstone’s Ta Khoa Nickel Project, a vertically integrated nickel mining-refinery located in Northern Vietnam.

This project has access to cheap and reliable renewable power, which Euroz sees as a key advantage for its aspirations as a vertically integrated (green) miner.

Ta Khoa is also geographically well located to service the largest battery manufacturers globally (Asia), with cost advantage in regards to labour, power and transport.

BSX’s business model is to source nickel sulphide concentrate offtake from its own base load feed and third party feed, and convert the nickel concentrates to a nickel pre-cursor (NCM) for sales into the lithium-ion battery and electric vehicle (EV) markets.

BSX enjoys local community and government support for its operation, which already has some infrastructure in place (small 450ktpa concentrator, camp and underground).

The company has a pre-feasibility studies capex of around US$360m, which is expected to be updated in the DFS for the integrated operations.

“BSX also has numerous exciting exploration targets, which continue to be drill-tested providing additional upside to an already very large nickel sulphide resource base,” said Euroz Hartleys.

“We maintain our Speculative Buy recommendation on Blackstone Minerals. But funding remains the key risks to our latest 60c valuation, and price target of 50cps,” it added.


Broker sees big upside on Baby Bunting

Broker Barclay Pearce Capital (BPC) has a Buy recommendation on Baby Bunting (ASX:BBN), with a target price of $3.70 (vs current price of $2.10).

Baby Bunting operates as a retailer of maternity and baby goods, targeting parents with children from newborn up to three years of age and parents-to-be.

The firm’s product categories include prams, cots and nursery furniture, car safety, toys, babywear, feeding, nappies and manchester.

It also offers baby related services including safety accredited car seat fitting, and the hire of nursery and travel safe products.

In the last half, Baby Bunting reported revenues of $254.9m, up 6.6% from the pcp.

Over the last three years, sales have grown 36.7%, noting that all Baby Bunting stores remained open during the Covid period. As life has normalised, the market share gains made through Covid have predominantly been held onto.

Post-COVID, the nursery essentials – being the company’s core category – continue to grow strongly and were up 12.7% in the half (over three years, this category is up 39.4%).

BBN has advised that it expects full year FY23 NPAT to be in the range $21.5-24m, compared to market expectations of $23.6m.

Revenue is forecast to increase to $584m in FY24, and $639m in FY25. Meanwhile, EBITDA is expected to be $72m in FY24, and $82m in FY25.

“We are updating our recommendation from Underperform to Buy,” said BPC.


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