Nufarm Ltd (ASX: NUF) shares could be an ASX 200 share to buy right now.
That's the view of analysts at Bell Potter, which see significant upside potential for the agricultural company's shares.
What is the broker saying about this ASX 200 share?
Bell Potter highlights that Nufarm released its results this week and delivered numbers that were in line with expectations and its guidance. It said:
Revenue of $3,443m was up +3% YOY (vs. BPe $3,464m). Operating EBITDA of $302.1m was up down -3% YOY (BPe $302.5m and implied guidance of $283-308m). Operating NPAT loss of -$22.9m compares to a -$3.7m loss in FY24 (and vs. BPe -$9.4m). Hybrid Seeds generated EBITDA of $67m (vs. $74m FY24) and the emerging seed platforms incurred a loss of -$53m (-$11m loss in FY24) inclusive of $29m in inventory impairments and ~$20m in operating losses in omega-3.
It was also pleased to see that Nufarm's debt had reduced to $824.2 million at the end of FY 2025, which was better than its guidance of $850 million to $925 million.
Looking ahead, the broker points out that management is guiding to EBITDA growth in FY 2026.
Key comments: (1) Expect strong FY26e underlying EBITDA growth under normal conditions; (2) Crop protection EBITDA continuing to grow, moderating on the +18% YOY growth in FY25; (2) Seed technologies growth in EBITDA from hybrid Seed and targeting a $30m YOY improvement in the emerging platforms; and (4) Expect positive free cashflow in FY26e and net debt/EBITDA of ~2.0x (vs. 2.7x in FY25).
Big return potential
In response to the results, Bell Potter has retained its buy rating on the ASX 200 share with an improved price target of $3.60.
Based on the current Nufarm share price of $2.37, this implies potential upside of 52% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into over $15,000 by this time next year if Bell Potter is on the money with its recommendation.
In addition, the broker is expecting a modest 1.3% dividend yield in FY 2026, and then 2.1% in FY 2027 and 3% in FY 2028.
Commenting on its buy recommendation, Bell Potter said:
NUF delivered a FY25 result modestly ahead of consensus, driven by +170bp topline outperformance in Crop protection revenue growth (relative to sector aggregates) and highlighted by a better-than-expected net debt position. In recent weeks we have witnessed a strengthening in omega-3 oil pricing indicators (following the IMARPE catch quota) while also noting continued YOY growth in active ingredient values.
