AGRANA raised to BUY, TP EUR 18.50 - Sweetened sugar market conditions
We see current levels of EUR 14 as attractive entry points in AGRANA. Levels around EUR 14 were last seen only during the start of the Covid-19 pandemic and during the peak of the financial crisisThe strong rise of sugar spot prices and the implementation of substantial price hikes as of October should compensate jumping energy prices more than we expected previously and should allow for a return to sustainable profitability in the Sugar segment going forward,
Current trading multiples (EV/EBITDA 6.0, EV/EBIT 11.6, PER 10.3) are below the longer-term averages of the share. In addition, DY 22e of 5.4% (we would even see upside risk to our DPS 22/23e of EUR 0.75) and P/BV of 0.7 look appealing.
AGRANA Beteiligungs AG (AGRANA) is an Austria-based company that processes agricultural raw materials. The Company manufactures foods and intermediate products for the downstream food industry, as well as for non-food applications. It operates through three segments: Sugar, Starch and Fruit. The products of the Sugar segment are marketed both directly to consumers through food retailers and to the sugar industry. In the Starch segment, the Company processes and refines mainly corn (maize) and potatoes into starch products. The Fruit segment develops and produces fruit preparations (fruit ingredients) and fruit juice concentrates. The Company operates over 50 production sites globally. The Company's subsidiaries include AGRANA Zucker GmbH, AGRANA Starke GmbH, AGRANA Marketing-und Vertriebsservice Gesellschaft mbH, AGRANA Bioethanol GmbH and Main Process SA, among others. The Company also manufactures animal feed and fertilizers.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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