Agricultural business ELD also delivered weak 1H earnings this week helping send the stock to a 3-year low, its now more than halved from its 2022 high. EBIT for the half fell -38% to $83m, around 10% below expectations as weak livestock and fertilizer prices weighed on the business i.e. sounds a touch like IPL. Earnings are expected (hoped) to improve in the second half as some markets normalize, with guidance for the FY of $180-200m was around 8% below consensus and clearly not believed considering the stocks descent.
- We have been flagging a potential “washout” in ELD and we believe that’s now unfolding and by definition slowly providing value.
- At this stage we see no reason to catch the proverbial ”falling knife” but value is undoubtedly starting to appear i.e. the stocks now trading on 8.9x for FY23.
MM remains neutral towards ELD
Add To Hit List
