ELD -10.81%: Fell today after downgrading earnings guidance for FY23 by ~6.5% relative to consensus. ELD (September year-end) are now guiding to underlying EBIT in the range $165m to $175m, 11% below their previous guidance range, although the market was at the lower end of that expecting $182m in underlying earnings. They sighted Lower than forecast Rural Products sales in recent weeks, greater than forecast pressure on margins especially in crop protection products & further weakness in the prices of cattle and sheep with a lower than forecast offset from volumes traded.
Distilling this down, clearly a negative update and the ELD turnaround is still taking shape, however ELD is trading at circa 9.7x FY24 PER, well below its peers at around 16.8x, with the next potential catalyst in November when it unveils its next three-year strategic plan.
MM remains long ELD in our Flagship Growth Portfolio, and may average on a move to ~$6
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