Citi trims Elders target price after soft half-year result
Make us a preferred source
Make us a preferred source on Google
The news: Citi has slashed its target price on agriculture and real estate group Elders after dry conditions in South Australia and Victoria weighed on the company's first-half earnings.
The numbers: Citi cut its target price on Elders from $9.75 to $8.60 but retained its 'buy' rating on the stock. Elders shares fell 6.7% to $6.16 on Monday after the group reported its half-year result.
The context: Citi analysts said lower demand for crop protection in South Australia and Victoria has been coupled with heightened competition leading to lower prices.
However, the analysts noted Elders delivered a "rather optimistic outlook" for the second half of the year.
What they said: "There is no shortage of sequential upside catalysts to consider in 2H including backward integration, bolt-ons, and wool handling, as well as continued momentum in livestock, and real estate services," the analysts said.
"Further, there could be further upside from increased demand for post-emergent crop protection products in SA and VIC if weather turns."
The source: Citi research
