Nufarm Ltd (ASX: NUF) shares have been in great form in recent months.
For example, the ASX 200 stock has risen almost 35% since the start of October.
This leaves the agricultural chemicals company's shares trading within sight of a 52-week high.
Unfortunately, one leading broker is now calling time on its rally and has downgraded its shares.
ASX 200 stock downgraded
According to a note out of Bell Potter, its analysts have downgraded the company's shares to a hold rating with an unchanged price target of $6.35.
While this still implies potential upside of 9% for investors over the next 12 months, the broker feels there isn't a sufficient risk/reward on offer to support a buy rating.
Though, it certainly doesn't think that investors should be offloading the ASX 200 stock right now. It feels it would be well worth holding tight to them given its belief that FY 2025 could be a standout year for the company.
For example, Bell Potter expects Nufarm to report a 4% decline in net profit after tax to $117.6 million in FY 2024. But in FY 2025, it forecasts an impressive 32% jump in profits to $155.7 million and then another 25% increase to $195.6 million in FY 2026.
A key driver of this growth is expected to be the Beyond Yield platform from its Seed Technologies business, Nuseed. The broker commented:
NUF continues to trade at a reasonably large discount to global peers (which in the recent months have re-rated) and we continue to see FY25e as likely to be the year when the Beyond Yield platform takes over as the growth engine for NUF. However, considering the recent share price we move we moderate our rating from Buy to Hold.
