Why did Elders (ELD) shares crash?
ELD -24.42%: the agricultural services company saw shares smacked more than 20% today after providing FY24 guidance for the first time. The first half has been hit by falling sentiment in the sector on the back of El Nino, lower crop protection prices, cheap livestock prices and a slow start to the winter crop particularly in WA. While an improvement is expected in the 2H, Elders expect EBIT to be ~25% lower than consensus, guiding to $120-140m. Leverage is expected to remain above the company’s target range, though Elders expects it to fall back in line by early FY25. Shares in Elders had been tracking higher ahead of the update, up ~30% this calendar year amidst optimism the ag sector was turning.
- Today’s guidance miss looks to be near a low point of earnings for Elders, a stock with a history of painful downgrades.
