Kepler cuts ForFarmers on lower prospects as cost pressures mount

ForFarmers NV

09/03/2022 12:16

** Kepler Cheuvreux cuts ForFarmers  FFARM.AS  to "reduce"
from "hold", citing a quick deterioration in the Dutch
agricultural feed maker's short- and long-term prospects
    ** The broker cuts its TP by 41% to EUR 2.30, mainly on
lower long-term estimates, and says the shares look overvalued
considering prospects despite the company's "nice" dividend and
free cash flow
    ** For 2022, Kepler sees continued bottom-line pressure from
energy and raw material input costs due to the rise in soft
commodity and natural gas prices
    ** In the long term, it expects the company to lose volumes
and margins in key markets such as the Netherlands and Belgium,
with added pressure from nitrogen emission reduction policies
    ** "One avenue to alleviate the pressure arising from a
shrinking market would be consolidation, which would need to
come from multiple smaller deals, as the potential for
consolidation between the biggest players seems limited," Kepler
adds
    ** Out of the four analysts covering the stock, three rate
it "hold" and one "strong sell"

 (Reporting by Olivier Cherfan)
 ((olivier.cherfan@thomsonreuters.com))