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Old Minnett: Nufarm Limited shares are a buy

Shares in crop protection company Nufarm Limited (ASX: NUF) were down 1.3% to $8.58 at the time of writing off the back of a 12-month period of declines, with the share price dropping 15.8% from its 52-week high of $10.20.

Private wealth manager Ord Minnett have upgraded Nufarm Limited from a hold to a buy recommendation noting that Nufarm has enjoyed strong-sales momentum in core geographies despite “little or no market growth” recently.

Ord Minnett has raised its price target on Nufarm from $9.00 to $10.50, with “increased valuation support” behind the upgrade in rating.

Nufarm posted half-year results to January 31, 2017 late last week, with underlying NPAT dropping 46% from the previous corresponding period and underlying EBIT also down 12% – results Ord Minnett pegged to weakness in its Latin America market and downtime at the Laverton plant.

Nufarm are expecting a turnaround for the second-half with EBIT growth guidance of between 5% and 10% and a product portfolio diversification strategy tipped to improve margins and lead to new product launches.

Investors who have been keen on Nufarm should head to the starting blocks sometime soon.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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