Results were in line with recently downgraded guidance. Morgans believes FY16 will be a base for earnings and growth will resume in FY17 from internal business improvements, new acquisitions and a better season.
As a result, the broker has upgraded forecasts. The broker retains a clear preference for Elders ((ELD)) and believes the easy wins following a weak competitive environment are now over for Ruralco.
A Hold rating is retained in the target is raised to $3.10 from $2.85.
Target price is $3.10.Current Price is $3.15. Difference: ($0.05) – (brackets indicate current price is over target). If RHL meets the Morgans target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).