Agricultural chemicals, seed companies well positioned in 2023 - Citi

Nufarm

26/01/2023 23:51

** Brokerage Citi sees agricultural chemicals and seed
companies to be well positioned as farmers are likely to spend
on high-quality seeds and chemicals on the back of healthy
incomes
    ** Citi raises FY23/24 net profit after tax (NPAT) estimates
by 2% for Australian seed tech co Nufarm  NUF.AX , noting a
positive agriculture market and favourable conditions for
seed-related businesses
    ** Brokerage also raises PT on NUF to A$6.90 from A$6.80 
and maintains "buy" rating
    ** Citi trims FY23 NPAT estimate for fertiliser maker
Incitec Pivot  IPL.AX  by 15% due to lower gas prices and as the
brokerage's slashed fertiliser price estimates
    ** Brokerage, however, raises IPL's FY24 NPAT estimate by
10% on lowered gas prices, and FY25 NPAT estimate by 32% after
adjusting ammonia and di-ammonium phosphate prices higher
    ** Citi raises PT on IPL to A$3.95 from A$3.90, but retains
"neutral" rating
    ** While IPL undertakes a strategic review of Waggaman
facility, a potential delay in demerger of its explosives
manufacturing business timeline by 6-12 months lead us to remain
on the sidelines - Citi
    ** In 2022 NUF and IPL gained 26.4% and 16%, respectively 
 (Reporting by Udbhav Krishna P in Bengaluru)
 ((UdbhavKrishna.P@thomsonreuters.com;))