FORFARMERS: When the Going Gets Tough, the Tough Get Going
We expect disappointing 1H19 results as ForFarmers will be unable to fully pass on higher logistics, energy and raw materials costs to its farmers. It could take a while before the stock will recover because of the unfavourable impact of some temporary purchasing positions on the 1H19 results.However, we see no reason to lower our € 8.5 Target Price which is a weighted average of our basic DCF valuation of € 8.28 (75%) and our € 9.39 valuation in case of a € 200m acquisition (25%). Our more positive stance (from Hold to Accumulate) is underpinned by our analysis of a most likely acquisition scenario of € 200m as a sequel to the ForFarmerisation process.
ForFarmers NV is an agricultural feed company based in the Netherlands that offers feed solutions for conventional and organic livestock farming. Its product portfolio comprises, among others, products for crop farming and pasture farming, as well as feed for the ruminant, swine, poultry and equine sectors, including compound feed and blends, feed for young animals and specialties, raw materials and co-products to seed and fertilizers. Its core activities are feed production, logistics and the provision of total feed solutions. The Company operates through the segments The Netherlands, Germany/Belgium and the United Kingdom, and operates approximately 40 production facilities in these countries.
We are a financial services provider for several types of professional clients, each with distinct needs.
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