The Breville Group Ltd (ASX: BRG) share price has been a positive performer on Friday.
In afternoon trade the appliance manufacturer's shares are up 2% to $25.50.
This means the Breville share price is now up an impressive 44% since the start of the year.
Is it too late to buy Breville shares?
The good news for investors is that it may not be too late to jump on the Breville train.
According to a note out of Goldman Sachs, its analysts have just upgraded the company's shares to a buy rating with a $30.35 price target.
This price target implies potential upside of over 19% from the current level.
Why did Goldman Sachs upgrade its shares?
The broker made the move after the release of Breville's full year results earlier this week.
Breville reported a 25% increase in revenue to $952.2 million and a 26% lift in EBITDA to $122.2 million. Both figures were comfortably ahead of Goldman's expectations for FY 2020.
Pleasingly, Goldman Sachs doesn't expect its growth to stop any time soon. This is thanks to its international expansion plans.
Its analysts commented: "BRG continues to extend its runway for growth as it expands into new geographies (Italy, Portugal and Mexico were confirmed for FY21)."
"Our analysis shows that if BRG were to achieve 50% of the relative market penetration it has in the ANZ market in North American and European markets, we estimate its EBIT [earnings before interest and tax] potential could be 78% higher than our current FY23E EBIT forecast, and if BRG achieved 100% of the relative market penetration of ANZ, its EBIT potential could be 217% higher."
Goldman sees this this optionality as highly attractive. For now, the broker is forecasting EBIT of $130.6 million in FY 2021, $156.2 million in FY 2022, and $179.4 million in FY 2023. This compares to FY 2020's EBIT of $122.2 million.
Should you invest?
I agree with the broker on Breville and feel it could be a great long term option for investors in the retail sector along with Accent Group Ltd (ASX: AX1) and Kogan.com Ltd (ASX: KGN).
