Breville: Geographical Expansion Set to Slow

We make no changes to our AUD 20 fair value estimate for shares in Breville. Breville is a high-quality company, with significant brand equity that underpins its narrow economic moat. The company also has a long runway of growth as it expands into new countries and product categories. But shares screen as expensive at about a 30% premium to our valuation. With elevated cost-of-living pressures, discretionary spending is firmly in the spotlight. Purchases of Breville products are discretionary, a weaker consumer is a key cyclical risk to a firm selling premium-priced products.