AGRANA raised to BUY, TP EUR 21.0 - Going through the trough and sweetened outlook
Reinitiation after an analyst change with a BUY rating. TP of EUR 21.0 offers about 15% upsideCurrent valuation looks reasonable being below its long term average, should protect the shares on the downside.
As positive catalysts we see: 1) rising sugar prices, 2) indications for better harvests this year, 3) the opening of gastronomy, hotels and the event business supporting demand for fruit juice and fruit concentrates, 4) the strong dynamics of the industrial sectors benefiting the Starch segment, 5) in Sweden and the UK, E10 petrol will become standard over this summer likely supporting Ethanol quotations and the potential introduction of Ethanol in Austria and 6) the underlying trend towards functional food, where we see AGRANA well positioned as the global number 1 for fruit preparations.
After the appointment of a new CEO in June the transformation from a raw material processor to an increased focus on more complex value-added products can act as additional catalyst
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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