ASX consumer staples stock Ricegrowers Ltd (ASX: SGLLV) has struggled so far in 2026.
The company purchases and stores paddy rice, and is involved in the milling, processing, manufacturing, procurement, distribution, and marketing of rice and related products, animal feed and nutrition products, groceries, and others.
Its share price has fallen more than 26% year to date.
This included more than a 7% decline yesterday after the consumer staples company released a Trading and Market update yesterday.
Image source: Getty Images
What did the company report?
Ricegrowers released updated FY26 guidance yesterday.
It said it still expects NPAT growth in FY26, driven by its business mix, disciplined execution, and focus on margins.
However, full-year revenue is now expected to be similar to or slightly below last year due to:
- Strong competition in Pacific markets affecting lower-margin sales; and
- Smaller crop volumes and lower yields, reducing product available for sale.
It also noted a sharp appreciation of the Australian dollar against the US dollar is negatively impacting the translation of results from the Group's foreign operations.
Additionally, it said conflict in the Middle East is disrupting global shipping routes and logistics and is impacting the Group's sales in this sizable market in the near term.
Despite yesterday's 7% fall, a new report from Bell Potter indicates it could currently be a value play.
Here's what the broker had to say.
Updated outlook from Bell Potter
Bell Potter noted that estimated FY26 revenue is expected to be in line with or slightly below FY25 levels.
The broker said this reflects the impact of lower global rice prices, a stronger AUD, supply chain disruption in the Middle East and the retention of 2025 rice crop for the 2026 program.
Our forecasts had already assumed a -3% YoY contraction in group revenue in FY26e and midsingle digit YoY NPAT growth. We have reduced these forecasts to account for softer trading, particularly in the International division.
Buy rating retained
Bell Potter decreased its price target on this consumer staples stock to $17.00 (previously $18.75).
However it maintained its buy recommendation.
In recent months we have seen a recovery in global rice price indicators and a weakening AUD which in isolation imply an improved position relative to domestic CY26e contract prices.
However, we have shifted our thought process to two consecutive poor cropping outcomes, to reflect the current low levels of SMDB storage utilisation and the rising risk of drier conditions through 2HCY26. Despite these headwinds we retain our Buy rating.
From yesterday's closing price of $12.22, the updated price target indicates an upside potential of 39%.
