Several issues, such as manufacturing complexities, a stretched balance sheet and the disruption from coronavirus add to Morgan Stanley's concerns about the stock.

First half earnings (EBIT) were well below estimates and FY20 net profit guidance of $17-21m implies Blackmores will not make a profit in the second half.

The broker maintains an Equal-weight rating. Industry view is: Cautious. Target is reduced to $66 from $71.

Sector: Household & Personal Products.

Target price is $66.00.Current Price is $77.85. Difference: ($11.85) - (brackets indicate current price is over target). If BKL meets the Morgan Stanley target it will return approximately -18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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