Nufarm Ltd (ASX: NUF) shares were making headlines yesterday after the ASX materials stock soared 13% in a single session.
Investors were gobbling up Nufarm shares after releasing its FY 2026 half-year results.
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What did Nufarm report?
For the half year ended 31 March 2026, it reported:
- Statutory Net Profit After Tax $38 million, up 28% on the prior corresponding period (pcp)
- Underlying NPAT (uNPAT) $52 million, up 35% on pcp
- Underlying EBITDA (uEBITDA) $243 million, up 18% on pcp
- $193 million improvement on pcp in free cash flow
- Net debt $1.23 billion, a reduction of $135 million on pcp
- Net debt to uEBITDA for twelve months to 31 March 2026 of 3.6x, a 20% reduction on pcp
- FY26 Outlook for uEBITDA and Leverage reaffirmed.
Commenting on the announcement, Nufarm CEO Rico Christensen said
We are pleased with first half performance and are well placed to deliver strong growth in underlying earnings and a significant reduction in leverage for the full year, consistent with previous guidance.
We have made clear progress on the priorities we set in November last year, delivering earnings growth, improved cash flow and a reduction in leverage. The benefit of our increased strategic focus is visible in the margin improvement in Crop Protection and significant uplift in earnings from our Seed Technologies business.
Bell Potter weighs in
Following this result, the team at Bell Potter issued updated guidance on Nufarm shares.
Nufarm is one of the world's leading developers and manufacturers of seeds and crop protection solutions.
The broker noted that the company's Seeds business was a standout performer during the half.
EBITDA more than doubled to $58 million, helped by significantly smaller losses in the omega-3 platform business.
Cash flow also improved compared with the prior year, and net debt declined to around $1.09 billion excluding leases. Debt levels finished the period in line with management guidance.
Looking ahead, management remains confident about FY26.
The company expects strong earnings growth, supported by continued improvement in crop protection and further growth in the Seeds business.
Nufarm is also progressing with its cost-saving program, targeting $50 million in annual savings by the end of FY26, with an additional $50 million reduction plan for FY27–28.
Upside in tact
Based on this guidance, the team at Bell Potter retained their buy recommendation and $3.60 price target on Nufarm shares.
From yesterday's closing price of $2.91, this indicates an upside potential of almost 24%.
NUF is executing on its cost out initiatives ($32m of the $50m FY26e target achieved and a $50m target in FY27-28e) with a more favourable backdrop in crop protection markets and omega-3 (a doubling in fishoil pricing). Despite this NUF trades at a ~25% discount to global crop protection and seed peers.
