Elders Ltd (ASX: ELD) shares started the week in a very disappointing fashion.
On Monday, the ASX 200 share crashed 23% following the release of its half-year results.
Has this created a buying opportunity for investors? Let's find out.
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What is Bell Potter saying about this ASX 200 share?
The team at Bell Potter has been looking over the result. It highlights that Elders fell short of expectations with its results. It said:
ELD reported 1H26 underlying EBIT slightly below our forecasts at $76.6m (vs. BPe of $77.9m). Key operating statistics of the result included: Operating results: Operating revenue of $1,768m was up +25% YoY (vs. BPe $1,789m). EBIT of $76.6m was up +19% YoY (vs. BPe of $77.9m). Underlying NPAT of $38.0m was down -1% YoY (and BPe of $41.3m). Gross profit, up +22% YoY, was stronger than forecast, particularly in crop protection and ERS, however, operating costs are running higher than forecast, up +23% YoY and largely driven by a $15m YoY uplift in corporate services.
Speaking about its outlook, the broker adds:
Key outlook comments include: (1) ERS to benefit from margin optimisation program (SYSMOD) and strong livestock and wool prices; (2) Focus on procurement synergies from integration with Delta in Crop Protection ; (3) AIRR to continue positive momentum in 2H26; (4) Delta to have a stronger 2H26e contribution, with synergies weighted to 2H26; and (5) pressure on cost base to ease in 2H26.
Should you buy the dip?
According to the note, the broker remains positive on the ASX 200 share despite the earnings miss.
In response, Bell Potter has retained its buy rating on Elders' shares with a reduced price target of $6.45 (from $9.00).
Based on its current share price of $5.55, this implies potential upside of 16% for investors over the next 12 months.
In addition, Bell Potter is forecasting fully franked dividend yields of 6.5% in FY 2026 and then 7.2% in FY 2027.
Commenting on its buy recommendation, Bell Potter said:
1H26 was a consensus miss on higher SYSMOD linked costs and to a degree reflects dual running costs that should reduce into FY27e. However, this was poorly communicated and largely mitigated the benefit of operating leverage. Delivering on the promise of Delta, backward integration and SYSMOD, while unwinding duplicate cost structures are central to EPS growth, but this needs to be done in a potentially more difficult 2HCY26 seasonal backdrop with a CEO transition.
