GrainCorp shares tumble on Bell Potter downgrade
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The news: GrainCorp shares tumbled on the ASX after Bell Potter downgraded its recommendation on the agriculture group.
The numbers: GrainCorp was down 2.3% to $8.93 per share by 2:30pm AEDT, making it the second-worst performing stock across the ASX 200.
Bell Potter downgraded its recommendation on GrainCorp from 'buy' to 'hold' and cut its target price 3.9% from $10.20 to $9.80.
The stockbroking firm also reduced its NPAT forecasts by 6% in FY25 and 1% in FY26 due to a lower FY25 winter crop forecast.
The context: Bell Potter had expected a strong September crop estimate from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARE).
However, ABARE's latest corp report has flagged increased risk to southeastern production forecasts following a frost event in the region.
Consensus estimates for GrainCorp's FY25 EBITDA have also lifted 8% in the past month and 21% over the past three months, Bell Potter analyst Jonathan Snape said.
What they said: "On face value we are now likely approaching the peak in positive consensus earnings revisions and reweight our rating accordingly," Snape said.
The source: Bell Potter research
