Australia's Elders trading update better than expected - Citi

Elders

14/03/2022 22:53

** Analysts at Citi say agribusiness Elders'  ELD.AX 
trading update was better than expected on back of strong
seasonal and agricultural conditions in FY22 
    ** ELD said on Monday, it expects FY22 underlying EBIT to
rise in a range of 20% to 30% from FY21 underlying EBIT
    ** Citi raises PT to A$14.50 from A$13.95, downgrades rating
to 'neutral' from 'buy' as the stock valuations are close to
fair value
    ** Brokerage firm says FY23 to cycle a tougher competition
and experience more average seasonal conditions and crop prices 
    ** We expect Rural Products sales to decline by 8%
year-over-year as a result of this turn in the cycle - Citi 
    ** Citi says co's agency business benefited from higher
livestock prices; however, expects cattle and lamb saleyard
prices to decline in FY23 as supply increases with the
herd/flock rebuild; with livestock agency earnings forecast to
decline by 2%
    ** However, ELD's strong balance sheet could fund further
inorganic growth to continue the earnings upside - Citi
    ** Seven of 11 analysts rate the stock "buy" or higher,
three "hold" and one "sell" or lower; their median PT is A$13.6–
Refinitiv Eikon data

 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))