Jefferies sees spiking commodity prices weighing on United Malt Group

United Malt

20/03/2022 23:38

** Jefferies expects surge in commodity prices arising from
the Russia-Ukraine conflict to impact United Malt Group Ltd's
 UMG.AX  EBITDA
    ** The brokerage firm cuts co's FY22 EBITDA margin by 50
basis points due to risk of lag effects from higher prices but
maintains it FY23 forecast, citing that this is a one-off event.
    ** Says ongoing European geopolitical conflict could result
in spiking grain prices which co might have to pass to large and
small customers
    ** Adds that higher oil prices could also affect co's
procurement costs which may also have to be passed on to
customers 
    ** Says that there could be a chance where co could resume
importing barley from Europe, while getting supplies from North
America as well to meet demand with possibility of additional
logistics costs
    ** Brokerage maintains a "Buy" rating and notes no change in
its price target of A$3.96
    ** Six of eight analysts rate the stock "buy" or higher, two
"hold" and none "sell" or lower; their median PT is A$4.68–
Refinitiv data



 (Reporting by Archishma Iyer)
 ((Archishma.Iyer@thomsonreuters.com;))