Why is the Graincorp share price sprouting on Tuesday?

Investors are reminded of Graincorp’s enviable position during bumper seasons.

| More on:
happy farming couple both with their thumbs up

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Graincorp share price is 3.3% higher at $9.39 after the company released its investor presentation
  • FY22 full-year guidance of $590 million to $670 million has been reaffirmed 
  • The company highlighted its end-to-end supply chain as a key advantage

The Graincorp Ltd (ASX: GNC) share price is firmly in the green after releasing an investor presentation.

In early trading, shares in the integrated grains company are getting a boost. At the time of writing, the share price is 3.3% higher at $9.39. For context, the S&P/ASX 200 Index (ASX: XJO) is also up a lively 1.11% this morning.

Benefitting from a positive reaction to the contents of its latest presentation, Graincorp is leading the consumer staples sector out of the gates on Tuesday.

What’s growing the Graincorp share price today?

The grain logistics and storage company is getting extra attention on the ASX today. Typically, an investor presentation covers information already known by the market. However, today’s presentation has been marked as price-sensitive, indicating there are likely some important details hidden within it.

Before we dive deeper, here are a few main points that could be influencing the Graincorp share price:

  • Reaffirmed prior FY22 full-year guidance of $590 million to $670 million in underlying EBITDA
  • Dividend payout ratio target of 50% to 70% with “optionality to pay special dividends in years” ahead
  • Well-positioned amid global supply chain disruptions
  • Potential for third consecutive bumper crop across Australian east coast

Possibly the biggest takeaway from Graincorp’s presentation to shareholders is its insulation from some of the strongest pressures faced by other companies at the moment. For example, it touted its end-to-end supply chain along the east coast. This includes seven bulk grain port terminals and approximately 160 storage sites.

At a time when grain prices are at multi-year highs, the ability to deliver the product to ports and get it shipped is enabling the company to capitalise on the situation.

What else?

Importantly, the retained EBITDA guidance indicates Graincorp remains largely unaffected by the conflict in Ukraine. This is despite Europe and Ukraine exports making up 85 million tonnes of global exports.

Notably, the company highlighted its global footprint which has given the company some optionality. For example, Graincorp earmarked Canada as a “key part” of its multi-origin strategy.

More than anything, the presentation has likely provided reassurance to the Graincorp share price today. The company currently holds a market capitalisation of $2.14 billion.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A woman blowing gold glitter out of her hands with a joyous smile on her face.
Share Gainers

Guess which ASX mining share is rocketing 30% on a ‘significant new discovery’

Meeka Metals has set off in vertical fashion today.

Read more »

A woman standing on a path flanked by big green trees is surrounded by colourful balloons tumbling from the sky.
Share Gainers

Why did the Pure Hydrogen share price pop 21% today?

Why did Pure Hydrogen shares have such an amazing day today?

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Share Gainers

Why Coronado Global, Lake, Megaport, and REA shares are storming higher

These ASX shares are having a good day...

Read more »

A girl runs along with her kite flying high in the sky.
Share Gainers

3 ASX mining shares rocketing by more than 20% today

Up we go in another day of double-digit gains for the ASX metals and mining equity bucket.

Read more »

Two men laughing while bouncing on bouncy balls
Share Gainers

Why is the BrainChip share price bouncing 6% higher today?

What's causing the BrainChip share price to pop on Tuesday?

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

Why is the Lake Resources share price powering up 17% today?

What's going on with the Lake Resources share price on Tuesday?

Read more »

A Cronos Australia farmer and ASX cannabis shares investor stands in a field of cannabis plants and smiles at the camera
Share Gainers

Why is the Incannex share price spiking 8% on Tuesday?

The stock has caught a bid on Tuesday.

Read more »

A little Asian girl is so excited by the bubbles coming out of her bubble machine.
Share Gainers

Why has the Redbubble share price burst 17% higher on Monday?

What pushed the e-commerce company's shares higher today?

Read more »