The team at Bell Potter have run the ruler over the ASX-listed agricultural sector and has come up with three companies they reckon are worth having a look at.
The Bell Potter team warns that investments in the sector can be high-risk, with commodity prices and seasonal factors coming into play.
That said, they've named three companies which they've picked on the basis of "valuation dislocations where we see a buying opportunity''.
Bega Cheese Ltd (ASX: BGA)
This company, which Bell Potter says sells its products both locally and abroad, has made some good changes recently, they reckon.
The Bell Potter team goes on to say:
Following recent restructuring announcements, with regard to the closure of Strathmerton and winding down of the PCA operations, there appears a clear pathway towards a $250-270m EBITDA target. If successful in generating this return and having consideration for the cash costs to achieve this target it would imply a share price of $8.00-9.00 per share (at BGA's historical ~12x EBITDA multiple).
Keep in mind that the current share price is just $6.04 per share.
Bell Potter says the company has a "clearly-articulated strategy" towards generating more than 20% earnings per share growth, and the broker has a price target on Bega shares of $7.
Rural Funds Group Ltd (ASX: RFF)
This entity is a listed investment trust with a portfolio "focused on almond orchards, vineyards, cattle, cotton and macadamias'', Bell Potter says.
The Bell Potter team goes on to say:
Assets in the portfolio are some of the most productive in the industry and leased to high quality tenants including Treasury Wine Estates, Olam, JBS, AACo and Select Harvests.
The analyst team say the share price's current discount to net assets of about 35% is well above the historical average of about 5%, and they expect the company to start selling off assets next year to unleash some of this untapped value.
Bell Potter has a price target on the shares of $2.45 against $2.04 currently.
Elders Ltd (ASX: ELD)
Elders is a leading supplier of fertiliser, agricultural chemicals, and animal health products, and also has a real estate arm and is active in the wool and livestock sectors.
Bell Potter said it saw encouraging signs for FY26, "with livestock turnoff values up about 35% year on year through the first quarter of 2026, stable to rising crop protection active ingredient values and modestly higher fertiliser price indicators''.
Bell Potter said Elders could drive double-digit earnings per share growth across the next two financial years, which "does not look reflected in the current share price''.
Bell Potter has a price target on Elders shares of $9.45 compared with $6.99 currently.
