Brief: BTG Pactual raises price target for sugar and ethanol firms

Adecoagro

21/03/2016 17:26

BTG Pactual analysts on Monday raised their price targets for 
Brazil's Cosan SA Industria e Comercio  CSAN3.SA  and Sao 
Martinho SA  SMTO3.SA , as well as for Argentina's Adecoagro 
 AGRO.N , citing favorable market conditions and a positive 
2016/17 cane crop. 
     
    * BTG Pactual in a research note raised Cosan's price target 
to 40 reais from 31 reais. It increased Sao Martinho's shares 
target to 65 reais from 55 reais and also elevated Adecoagro's 
target to $16 from $12. 
     
    * The investment bank said there are no signs that a trend 
for global sugar deficits will change anytime soon, as 
consumption grows and supply capacity is capped in many 
producing countries. 
     
    * The bank said ethanol prices in Brazil are still near 
record levels as mills start crushing a record cane crop. BTG's 
analysts Thiago Duarte and Jose Luis Rizzardo said prices should 
fall as the crush advances, but ethanol values "should remain at 
very profitable levels". 
     
    * Although recognizing the sugar and ethanol cycle is not in 
the bottom anymore, with shares gaining more than 35 percent 
since October, BTG Pactual still think valuation remains 
supportive. 
 
    Source: BTG Pactual Sugar & Ethanol research note 
 
 ((marcelo.teixeira@thomsonreuters.com))