Credit Suisse believes the main issue in the first half result is the mismatch between market expectations and the ability or willingness of the company to effectively manage working capital fluctuations.
The outcome for shareholders is the suspension of the interim dividend. Credit Suisse believes there is a value opportunity on the basis that the market is over-weighting the weather-driven fluctuations in earnings.
The broker believes it will be important for investors to separately consider litigation and regulatory risks, largely related to glyphosate. The broker maintains an Outperform rating and reduces the target to $8.90 from $9.53.
Target price is $8.90.Current Price is $4.23. Difference: $4.67 – (brackets indicate current price is over target). If NUF meets the Credit Suisse target it will return approximately 52% (excluding dividends, fees and charges – negative figures indicate an expected loss).