We Raise our FVE for Breville by 43% Following Transition to a New Analyst

We raise our fair value estimate for Breville to AUD 16.00 per share from AUD 11.20 following the transition to a new analyst. Breville's range of small electrical appliances have established significant brand strength, as demonstrated by the firm's ability to charge a substantial price premium to competitors--notably in the United States and Europe--underpinning the firm's narrow economic moat. Breville are exemplary stewards of capital. The firm's foray into Europe is demonstration of this. We forecast the firm's European expansion, and continued solid growth in North America, will drive an EPS CAGR of 13% over the five years to fiscal 2024. However, there is execution risk in rapid expansion, and our high uncertainty rating remains intact. Despite the 43% rise in our fair value estimate, shares in Breville remain materially overvalued. We also increase our fair value estimate for no-moat Premier Investments by 3% to AUD 16.00 per share given their 28% ownership in Breville.