Elders Ltd (ELD)
ELD SHARE PRICE IS STRUGGLING. WHEN DO YOU EXPECT THE SHARE PRICE TO RECOVER?
The Latest Q&A
Answer
Hi Indran,
Elders (ELD) has been in a downtrend since 2022 and although it enjoyed a strong bounce through 2023/4 as you say it’s been struggling of late. In November, ELD announced a $475 million acquisition of Delta Agribusiness, funded through a combination of new equity, debt, and issuing new shares to Delta shareholders. While strategically significant, the substantial financial outlay and integration risks have unsettled investors leading to the stock trading below the $7.85 cap raise price.
Also, when the stock was in suspense for the raise, the company announced an underlying profit for FY24 that fell below consensus expectations, another factor that would have left a bitter pill in some investors’ minds – we didn’t like it, and MM held no exposure!
- We see no reason to buy/own ELD at this stage, it’s a complex business, that according to management, has been on the cusp of improvement for many years, yet something always seems to come up that hurts them.
- It’s very hard to identify when it will show green shoots of a recovery.
