As expected by Morgans, Elders reported a strong first half result, which was only slightly ahead of forecast though a material beat to consensus. Earnings (EBIT) growth of 40% was considered due to favourable operating conditions, strong execution and M&A.
The analyst highlights strong demand for crop inputs, elevated livestock prices, increased Real Estate profitability and successful integration of the AIRR acquisition and associated synergies.
The broker retains a Hold, due to high multiples and a belief that earnings growth will now moderate and cattle prices will eventually fall from current record high levels. The target price is increased to $11.95 from $11.85.
Sector: Food, Beverage & Tobacco.
Target price is $11.95.Current Price is $11.78. Difference: $0.17 – (brackets indicate current price is over target). If ELD meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
