New brokers' research by Forsyth Barr have an ''outperform'' rating and $14.25 target price, while Craigs Investment Partners has a ''buy'' recommendation, and a 12-month target price of $13.
Comvita shares were up 3.33% at $10.85 after yesterday's announcement, having peaked during the past year at $12.85 in May.
Forsyth Barr broker Suzanne Kinnaird said Comvita's just-signed heads of agreement to take a 51% stake in a joint venture with its existing distribution partner Shenzhen Comvita Natural Food Co Ltd followed a successful 12-year relationship with Shenzhen.
That included taking the Comvita brand to No1 on online sales of Taobao and No2 on Tmall, among all the honey brands.
''Consumer trust has been ingrained in the Comvita brand for over 20 years in China. We believe this will help the company leverage additional natural healthcare products into the market,'' Mrs Kinnaird said.
Craigs broker Peter Mcintyre said the JV was ''positive'' for Comvita.
''This will help Comvita secure greater control and margin capture over its key end-market into the medium term,'' Mr McIntyre said.
The JV was also important in that it would reduce future regulatory risk and ''grey channel'' reliance for Comvita in China.
Mr McIntyre said while the deal was still subject to Chinese regulator approval, that was expected to happen in coming coming months
Mrs Kinnaird said the emergence of Comvita as the pre-eminent manuka honey brand globally should give investors confidence it could drive growth from additional natural health products.
''China remains a core focus market for Comvita, with an estimated 50%-60% of product purchased by Chinese consumers,'' Mrs Kinnaird said.
However, she also threw out a caution, saying she expected Comvita's marketing expenditure to climb during the next few years to support product roll-out and more brand development in new markets, such as the US and Middle East.
While Comvita had announced a $400 million revenue target, not including acquisitions, by December 2020, Forsyth Barr set the target further out, at June 2021, she said.
The $400 million represented a more than 100% increase on Comvita's latest results and implied about 15% growth per year for the next five years, she said.
