In anticipation of first half results on May 17, Morgans forecasts over 35% earnings (EBIT) growth, underpinned by a much improved summer cropping season and high livestock prices.
Additionally, a buoyant real estate market and a full six months of the Australian Independent Rural Retailers (AIRR) acquisition should bolster earnings.
A Hold rating is kept due to high multiples and caution that earnings growth will moderate after the first half and cattle prices will eventually fall back. In the meantime, Morgans upgrades forecasts for higher than expected livestock prices and raises the target to $11.85 from $11.68.
Sector: Food, Beverage & Tobacco.
Target price is $11.85.Current Price is $11.58. Difference: $0.27 – (brackets indicate current price is over target). If ELD meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
