The company has reported its worst-ever annual result, UBS notes, heavily affected by drought and onerous rail take-or-pay contracts. A large grain trading loss of -$65m was incurred. Meanwhile, there was another record performance in the malt business.
UBS expects the grains division to return to positive earnings in FY20 but there remains a high level of uncertainty. The broker continues to believe the de-merger plan will unlock value and maintains a Buy rating. Target is reduced to $9.40 from $9.55.
Sector: Food, Beverage & Tobacco.
Target price is $9.40.Current Price is $8.16. Difference: $1.24 – (brackets indicate current price is over target). If GNC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
