A December report from Bell Potter has revealed two undervalued ASX shares.
The Analyst Outlook and Stock Picks December 2025 report included ASX shares from the Agriculture, Fast-Moving Consumer Goods (FMCG) sectors.
Jonathan Snape, Industrials Analyst, cautioned that investments in the Agricultural & FMCG sector should be considered high risk and come with volatility from both commodity prices and seasonal factors.
For this reason we tend not to so much focus on a directional share price move in the coming months but rather where we are seeing a value in the current share price relative to a stocks through the cycle earnings.
He said as such, the stocks Bell Potter identified should not so much be considered key picks on a directional 6 monthly share price direction, but rather valuation dislocations where there is a buying opportunity.
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Rural Funds Group (ASX: RFF)
Rural Funds Group is a real estate investment trust (REIT) that holds and leases agricultural land and equipment. The company manages around $2 billion of diversified farmland and assets.
According to Bell Potter's report, the current discount to market net asset value is well above the historical average 5% premium since listing.
Counterparty profitability indicators have been improving and farm asset values have been resilient, which would suggest that the underearning on unleased assets is the largest performance drain. Exiting or leasing these assets (combined value ~$387m) would result in reasonable AFFO accretion (14-18% on FY26e PF AFFO) with the scope to also reduce gearing, with this likely to be the greatest share price catalyst. We would expect execution against asset sales to emerge in CY26e.
The broker has a buy recommendation and price target of $2.45.
This indicates 21.29% upside from yesterday's closing price of $2.02.
Furthermore, the company is expecting to pay 11.73 cents per share dividend in FY 2026.
This is approximately a 5.8% dividend yield.
Elders Ltd (ASX: ELD)
Elders is an agribusiness that provides goods and services to Australian primary producers. This includes supplying fertiliser, agricultural chemicals and animal health products to rural and regional Australia.
In a note out of Bell Potter, the broker said it sees encouraging signs for FY26e, with livestock turnoff values up ~35% YOY through 1Q26TD, stable to rising crop protection active ingredient values and modestly higher fertiliser price indicators.
A more normal selling pattern in FY26e, delivery on SYSMOD and backward integration initiatives, sector activity tailwinds and consolidation of Delta are expected to drive high double-digit EPS growth in FY26-27e. This view does not look reflected in the current share price, with ELD trading at ~11x FY26e EPS.
The broker has a buy recommendation and price target of $9.45 on these ASX shares.
This indicates an upside of roughly 36%.
