Bunge Sees Weaker Agribusiness In 2021, Tops 4Q Profit Estimates

Bunge earned an adjusted $3.05 per share in the fourth quarter that topped analysts’ estimates of $1.82. The agribusiness and oilseeds company’s revenues came in at $12.6 billion in 4Q, beating consensus estimates of $10.9 billion. Shares were up by 2.7% in pre-market trading.

Bunge’s (BG) CEO Greg Heckman said, “Our performance in 2020 was exceptional reflecting the earnings strength of our platform. We delivered these strong results while completing the portfolio actions we originally identified, sharpening our financial discipline, and, importantly, keeping the focus on protecting the safety of our team during these unprecedented times.”

The company’s 4Q revenues were driven by its agribusiness unit, which generated sales of $9.3 billion, up by 25.2% year-on-year. The strength in the agribusiness was driven by higher elevation margins and oilseed crush margins in North America.

Looking ahead, Bunge expects its agribusiness to decline this year due to lower oilseed processing and production, particularly in Brazil. The company does however see some upside to its agribusiness driven by higher demand but tighter supply of commodities. The company forecasted adjusted EPS of $6 per share and a capex range of $425 to $475 million in FY21. (See Bunge stock analysis on TipRanks)

Around two months back, Credit Suisse analyst Robert Moskow raised the stock’s price target from $67 to $72 and reiterated a Buy rating. Moskow cited the management’s guidance of a strong agribusiness environment as “encouraging” as the analyst believed that oilseed crush margins have modestly declined since the guidance.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 analysts recommending a Buy and 1 analyst suggesting a Hold. The average analyst price target of $71.33 implies 5.4% downside potential to current levels.

Using the TipRanks Similar Stocks tool, Bunge scores an 8 out of 10 on the TipRanks Smart Score system as compared to its peers. This indicates that BG has a better likelihood of outperforming the market in comparison to its peers.

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