Executive summary

Table of Contents

Share price chart 3

Analysis of stock price movement 4

11^th February 2020- share price of the company slumps due to downgrading profit 5

21^st may 2020- decline due to underperformance of china market. 6

References 8

Introduction

Blackmores is one of the leading Australian health supplement company, the company was incorporated in 1930. The first store of Blackmore was opened in Australia Brisbane. the company is known for providing natural health supplements, they have a wide variety in terms of product portfolio which includes a range of vitamins, herbal, and nutritional supplements. besides that, the company is also known for supporting the community and they are one of the active participants in protecting the environment which has helped the company in establishing trust among its customers when it comes to natural health. The company is growing at a rapid pace, as they have recorded a market capitalization of $1.1 billion. They are operating in more than 18 markets across the Asia Pacific region with their products which are available across the globe. The main headquarters of the company is in Sydney Australia. Blackmore's group comes under an ASX-200 public listed company, the company is well-recognized with the code ASX: BKL. The company has more than 1400 plus employers working with them across the Asia Pacific region. The company is known for promoting the Wellness revolution by offering innovative natural health solution which could help people in improving their lives.

Share price chart

Analysis of stock price movement

31^st May 2018- stock price increased

19^th December 2018- share price declined

10^th July 2019- share price of declined by 26%

Blackmores have been performing quite well in the market and in recent years, the company has experienced massive growth. However, the company has recorded share price has decreased tremendously by 26%, and the main reason behind it the company earnings downgrades which were recorded in 2019. even the profits of the company which evaluated it for the nine months to March 2009, clearly indicated that the company profits had gone down by 14.3% and according to the company announcement which further stated that the company will not grow in the second half of the financial year. This was the major driving force that impacted the share price of the company (Blackmores Annual Report 2019 - xandercreative, 2019).

5^th September 2019- the share price of the company declined

On 5^th September the company has recorded a decline of 1% in share prices, which makes its share price standard at $ 72.17. Implies, the company have lost more than 42% of their value since the beginning of the year 2019 that has triggered the investors in selling their shares after the company has disclosed their result for the half-yearly in February. Besides the company poor performance in China market was also one the reason. It was also noticed that Blackmore was not able to meet the market expectations in both their results (half-yearly and full-year results) which were disclosed by the company. Besides that, the company performance in China market is continuously declining, and disappointing the results which were declared by the company had a direct impact on Their share prices negatively (Blackmores Annual Report 2019 - xandercreative, 2019).

11^th February 2020- share price of the company slumps due to downgrading profit

21^st may 2020- decline due to underperformance of China market.

OTHER INFLUENTIAL FACTORS; IMPACTING THE SHARE PRICE

P/E Ratio

ROE ( Return On Equity )

return on equity also plays a crucial role when it comes to impacting the share price of the company, Through the ROE The company’s ability to utilize their capital could be analyzed. Furthermore, it can be stated that Blackmore's share price has decreased by 15% in three months but the company's financial performance can be considered respectable (McMillan, 2014). Through the ROE company success could be analyzed that is converting shareholder investment into profit. however, the low earning growth of the company’s one of the big concerning factor but the company has a high rate of return and they are also investing in their profits. this factor can have a direct impact on the stock price (McMillan, 2014).

Conclusion

In the report, we have clearly seen some of the important factors which can lead to the stock movement of the Blackmores. In the report, we have analyzed the stock prices of the company for the last two years and the major impact on the share price of the company are one of the major reasons which we have seen is that in the mid-2018 company did not perform well especially in the Chinese market (Mulyono, 2015) and besides that, the share price went down due to the company announcement of their half-yearly and yearly results which were disappointing and besides that they were not able to meet the market expectations. In early 2019 they share price fell drastically and the main reason was that they were not performing well in the market and also because of the competitive pressure they were facing from their competitors. In 2020, it can be said that the share price of the company have increased little bit but then the due outbreak of coronavirus and their underperformance had severely hit their share price. In the report other factors have also been analyzed they are P/E ratio and ROE of the company, which states that the company will be performing much better in their coming up years as in the P/E ratio the company has able to manage the outperform their competitors and Return on equity, this factor can have a direct impact on the share price of the organization.

References

Mulyono, M., 2015. The Effects of Financial Ratio and Market Based Ratio toward the Stock Price of Manufacturing Industry Sector in Indonesia Stock Exchange. Binus Business Review, 6(3), p.431.

xandercreative. 2019. Blackmores Annual Report 2019 - Xandercreative. [online] Available at: <https://www.xandercreative.com.au/2019/08/23/blackmores-annual-report-2019/> [Accessed 12 August 2020].