ABARES has estimated a 22.1mt east coast winter crop for FY22 which compares to the bumper crop of 29.9mt for FY21.
On the basis of upgrades that have been delivered by ABARES over FY21, UBS suggests there is scope to lift FY22 forecasts further if favourable operating conditions continue.
For Graincorp the modest increase to earnings estimates from this forecast provides a large offset to increased grain derivative payments. UBS retains a Buy rating based on increased crop assumptions for FY22 and the potential for capital management. Target is $6.70.
Sector: Food, Beverage & Tobacco.
Target price is $6.70.Current Price is $5.16. Difference: $1.54 – (brackets indicate current price is over target). If GNC meets the UBS target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
