Australia's Graincorp underperforms ASX300 despite strong conditions - Jefferies
11/01/2023 22:45
** Jefferies says agribusiness co Graincorp Ltd GNC.AX has
underperformed ASX300 by 20% despite ongoing strong conditions
across Australia's key grain regions over the past 18 months
** Says the issue is the May 2022 wheat price peak and
subsequent decline despite the ongoing Russia-Ukraine war
** Adds GNC stock price is still surprisingly correlated to
the spot wheat price even as it takes little exposure to grain
prices
** Says another uncertainty for investors is GNC's
intentions for its surplus cash, adding that there remains some
disquiet and potentially a preference for more cash being
returned
** Brokerage retains price target of A$8.70 and "hold"
rating
** Five of 10 analysts rate the stock "buy" or higher, four
"hold" and one "sell"; their median PT is A$8.68– Refinitiv data
** Stock fell 7.2% in 2022
(Reporting by Echha Jain in Bengaluru)
((Echha.jain@thomsonreuters.com))