Nufarm Ltd (ASX: NUF) shares were on form on Wednesday.
The agricultural chemicals company's shares ended the day 11% higher at $2.47 following the release of a trading update.
But if you thought the gains were over, think again.
That's because Bell Potter is tipping this ASX 200 share to continue to rise over the next 12 months.
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What is the broker saying about this ASX 200 share?
Bell Potter was pleased with the company's update and highlights that its earnings guidance and balance sheet deleveraging were ahead of expectations. It said:
NUF has provided a positive trading update with underlying 1H26 uEBITDA expected in a range of $239-244m (vs. BPe of $231m and VA of $240m) and representing +16-19% YoY growth. The performance is driven by improved margins in crop protection, growth in the traditional hybrid seeds platform and a stronger performance in the Omega-3 and biofuel platforms
Net debt at 1H26, which is traditionally the seasonal peak, is expected at ~$1.23Bn, which is down $130m YoY and at 3.6x T12M EBITDA is down materially from the 4.6x T12M EBITDA reported at 1H25. This is an improvement from previous expectations of 1H26 net debt to be similar to 1H25 levels.
In addition, it was pleased to see that momentum was continuing. The broker adds:
Positive trading momentum has continued into April across all regions and the group is targeting an additional $50m in costs savings following a strategy refresh (following the change in CEO). The savings are on top of the run rate $50m in cost outs that were delivered in FY25 and realised over 2H25/1H26.
Nufarm shares tipped to rise
According to the note, the broker has retained its buy rating and $3.60 price target on the company's shares.
Based on where the ASX 200 share is currently trading, this implies potential upside of 46% for investors over the next 12 months.
Explaining its bullish stance and buy recommendation, Bell Potter said:
We are now in or approaching the most material selling windows for NUF and the majority of markets look supportive of reasonable demand levels of crop protection products and the most recent trading update confirms improved margin trends.
In addition, upward movements in active ingredients (glyphosate >30% gains in recent weeks) and omega-3 indicators all look to support a more favourable pricing backdrop for 2H26e. The potential for a faster selling window and restart of omega-3 oil sales have the scope to assist in deleveraging the NUF balance sheet further, which is already slightly ahead of schedule.
