Breville Group (ASX:BRG) rose 4.9% to a four-week high of $30.40 on Monday, topping the ASX 200 at lunch after a Citi survey pointed to favourable demand trends for coffee machines.
The poll of roughly 1,900 coffee drinkers across Australia, China, Thailand, the UK and the US found broadly positive signals for the category: increasing overall coffee consumption, a shift toward at-home coffee, and a willingness among consumers to trade up to more premium machines.
Citi analyst Sam Teeger said the results should support coffee-machine sales — a segment that makes up more than half of Breville’s group revenue. “Further, there are findings which we believe to be positive for Breville more specifically, including a) coffee bean delivery subscription services encouraging coffee machine upgrades/purchases, b) a preference for manual/semi-auto machines, and c) datapoints suggesting that Breville’s recent entry into China could be successful,” he said.
The key negative from the survey was price sensitivity: the cost of espresso machines remains the main reason people don’t use them, a potential issue as Breville’s newer products skew to higher price points. “That said, we found the survey data to be overwhelmingly positive for Breville and we think the key risks around the stock is how it navigates tariffs and transitioning supply away from China,” Teeger added.