Graincorp: Prime growing conditions create the "perfect storm" - Jefferies
12/05/2022 24:51
** Brokerage Jefferies says extraordinary agricultural
conditions, record grain prices and a weak Australian dollar
create the perfect storm for Australia's Graincorp GNC.AX
** The agribusiness firm reported an about five-fold jump in
first-half profit and declared a special dividend on Wednesday
urn:newsml:reuters.com:*:nL3N2X24LI
** GNC posted HY net profit after tax of A$246 mln ($170.90
mln), beating Jefferies estimate by 37%, driven by an increase
in sales volumes and grain prices
** Brokerage says GNC's FY23 outlook remains strong, with
prime growing conditions; raises EPS estimates for fiscals 2022
to 2024
** Jefferies says it likes "pretty much everything" about
GNC's results, but says the magnitude of estimate beat appears
to be more around timing of grain volumes or sales than anything
more fundamental
** Adds that farmers know the growth factors will reverse
one day and says it is therefore critical to know how GNC will
utilise its "extraordinary" cash flows and balance sheet
** Jefferies keeps PT unchanged at A$8.70, retains "hold"
rating
** Three of 11 analysts rate the stock "buy", six "hold" and
two rate it "sell"; their median PT is A$9.40 - Refinitiv data
** As of last close, stock up 26.6% this year
($1 = 1.4395 Australian dollars)
(Reporting by Himanshi Akhand in Bengaluru)
((Himanshi.Akhand@thomsonreuters.com;))