Macquarie says buy this ASX 200 stock for 30%+ return

Breville Group Ltd (ASX: BRG) shares could be in the buy zone right now according to one leading broker.

Let's see what its analysts are saying about this ASX 200 stock.

Why is the broker bullish?

Macquarie notes that industry data is supportive of its bullish view on this stock. This includes strong sales growth reported by De'Longhi and Nespresso. It said:

De'Longhi Revenue was +11.5% LFL, including Household +6.0% with "high-single digit organic growth" in coffee. Nespresso Q3 organic revenue +8.5%, including +5.3% price. Double-digit growth in the US, was supported by innovation and marketing. In Europe, organic growth trends improved in France, Switzerland and UK & Ireland, including resilience in out-of-home. Growth was fuelled by innovation (limited editions, functional coffees, double espresso formats, accessories).

It was a similar story over at Williams Sonoma, with its kitchen segment performing positively. Macquarie adds:

Williams Sonoma Kitchen segment delivered +7.3% LFL revenue growth, selectively increasing prices. WSM are focused on bringing new, innovative and exclusive products to market, as it gives better pricing power. WSM also noted a lot of promotions. WSM have been pulling back on promotions actively and improving full priced selling. WSM noted they still have "not seen any pull-forward of anything," with demand remaining broadly consistent.

Whirlpool's Kitchen Aid segment sales were +9.5% (cc), driven by new product launches, including Auto Coffee and cordless. EBIT margin +~230bps yoy to 16.5%, driven by price/mix and D2C business growth. SharkNinja: Cooking & Beverage sales were +6.3%, driven by Ninja Luxe Café espresso, partially offset by a decline in the air fryer and outdoor grill sub-categories. Food Preparation sales were +11.9%, driven by the frozen drinks sub-category, specifically the SLUSHi.

In light of this, Macquarie feels confident with its earnings estimates continues to forecast EBITDA growth of 3.8% in FY 2026, 13.4% in FY 2027, and 12.5% in FY 2028.

Big returns from this ASX 200 stock

According to the note, Macquarie has retained its outperform rating and $39.20 price target on Breville's shares.

Based on its current share price of $29.52, this implies potential upside of 33% for investors over the next 12 months. It also expects a 1.3% dividend yield, stretching the total potential return beyond 34%.

Commenting on its outperform recommendation, the broker said:

Outperform. The coffee segment, new market development and investment in new product development (NPD) continue to drive outperformance vs sector peers. We expect BRG to deliver 10%-plus compound revenue growth.

The post Macquarie says buy this ASX 200 stock for 30%+ return appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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