Citi assesses Nufarm is currently emerging from a tough three years for the agricultural industry. At 5x enterprise value/EBITDA estimates for FY21 the broker considers the stock is good value.
There is also a strong balance sheet post the sale of the Latin American business. Moreover, commercialisation of Nuseed’s omega-3 canola provides the long-term growth option.
Global peers have provided positive indications over the September quarter, particularly from Europe and Asia Pacific. Buy rating and $5.30 target maintained.
Sector: Materials.
Target price is $5.30.Current Price is $3.48. Difference: $1.82 – (brackets indicate current price is over target). If NUF meets the Citi target it will return approximately 34% (excluding dividends, fees and charges – negative figures indicate an expected loss).
