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On Wednesday, Citi analyst Thomas Palmer revised the price target for Bunge Limited (NYSE:BG) stock, reducing it to $76.00 from the previous target of $86.00. Despite this adjustment, Palmer has chosen to maintain a Neutral rating on the agribusiness company’s shares. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $86 to $115, and three analysts recently revising their earnings expectations downward.
The decision to lower the price target followed Bunge’s fourth-quarter earnings per share (EPS) falling short of expectations, and the company’s EPS outlook for 2025 being below the consensus of Visible Alpha. In response to this news, Bunge’s stock price saw a 5% decline on the day, pushing it near its 52-week low. Despite recent challenges, InvestingPro analysis shows the company maintains strong fundamentals with a "GOOD" financial health score and a modest P/E ratio of 8.8x.
Palmer elaborated on the factors influencing the price target change, noting similarities with Archer-Daniels-Midland Company’s (NYSE:ADM) recent performance, which also indicated a slow start to the year. However, both companies anticipate an uptick in earnings as 2025 progresses, particularly in crush margins. The analyst acknowledged the rationale behind the more optimistic earnings trajectory expected after the first quarter, citing biofuels incentives as a significant contributing factor.
Despite this, Palmer expressed skepticism about the guidance provided, suggesting that it might not be conservative enough. He indicated that there is a possibility that the earnings forecast could be revised downward in the next quarter, especially if Bunge’s acquisition of Viterra is completed by that time. This acquisition is pending and could potentially impact Bunge’s financials moving forward.
In other recent news, Bunge Global SA reported fourth-quarter earnings and revenue that did not meet analyst expectations. The agribusiness and food company announced adjusted earnings per share of $2.13, falling short of the $2.27 consensus estimate. The revenue, at $9.91 billion, also did not meet the anticipated $13.73 billion. The lower results were attributed to decreased processing results in the Agribusiness segment, primarily in North and South America, slightly offset by better performance in the Merchandising business.
For the full year of 2024, Bunge reported an adjusted EPS of $9.19, a decrease from $13.66 in 2023. The company’s outlook for 2025 was also less than encouraging, predicting an adjusted EPS of about $7.75, significantly lower than the $8.81 per share analysts had projected. Bunge expects lower results in 2025 from its Agribusiness and Refined and Specialty Oils segments, while anticipating an improvement in the Milling results. These recent developments present a comprehensive view of the company’s performance and future expectations.
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