Graincorp has issued a sizeable upgrade to FY22 guidance, now expecting earnings of $480-540m compared to Credit Suisse’s prior forecast of $405m and after-tax profit of $235-280m compared to the broker’s prior $189m.
Thr broker notes poorer northern hemisphere production is benefiting Australian grain exports, while potential export disruption driven by the Russia-Ukraine tensions could result in elevated grain marketing profitability.
Credit Suisse adjusts its forecasts accordingly, and expects Graincorp to finish FY22 with a cash balance of $207m, which could support a $1.00 per share special dividend.
The Neutral rating is retained and the target price increases to $7.17 from $6.78.
Sector: Food, Beverage & Tobacco.
Target price is $7.17.Current Price is $8.10. Difference: ($0.93) – (brackets indicate current price is over target). If GNC meets the Credit Suisse target it will return approximately -13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
