It has been a volatile year for S&P/ASX 300 Index (ASX: XKO) stock Elders Ltd (ASX: ELD).
The company is an agribusiness that provides goods and services to Australian primary producers.
It sells seed, fertiliser, agricultural chemicals, animal health products, and general rural merchandise. It also supplies professional and technical services to farmers via its network of agronomists.
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Rollercoaster 12 months
In the past 12 months, the ASX 300 stock has hit highs of nearly $8 per share, and lows of less than $5 per share.
Back in June, it was hovering around the $5 mark, but has since rallied significantly.
Since then, it has risen an impressive 30%.
When ASX 300 stocks bounce around this significantly, it can be difficult for investors to identify fair value.
However, a new report from Bell Potter has provided a fresh outlook for the next 12 months.
Slight downgrade
Overall, Bell Potter has downgraded Elders from buy to hold. The broker also slightly increased its target price from $6.45 to $6.70 per share.
The main reason for the downgrade is that Elders' underlying earnings drivers remain positive. However, growth is starting to moderate as the company faces tougher year-on-year comparisons.
Agency markets remain supportive. Cattle slaughter and yardings are both up 2% year on year, while cattle prices are up 23%.
Sheep volumes have fallen significantly, but this has been offset by stronger pricing, with lamb prices up 21% and mutton prices up 40%. Wool volumes are expected to be broadly flat to slightly higher, while the EMI is up 43%.
The broker also identified that crop conditions are favourable.
Recent upgrades to Australian crop forecasts, supported by rainfall, should help demand for Elders' agricultural services, particularly in Western Australia and southeastern Australia.
However, the forecast for summer crop acreage was weaker than expected, at 1.121 million hectares, down 17% year on year.
Minimal upside for ASX 300 stock
Overall, Bell Potter expects FY26 earnings to be broadly unchanged, with NPAT estimates revised by +1% for FY26, -2% for FY27, and -4% for FY28.
The broker believes the business remains fundamentally sound, but the earnings tailwinds are easing, which supports a hold rather than a buy rating.
From yesterday's closing price, the updated target from Bell Potter indicates roughly 3% upside over the next 12 months.
Following the recent recovery in the share price we are moving our rating from Buy to Hold.
Investments in Delta and Systems Modernisation programs are the largest drivers of near term growth, however, we see the large livestock tailwinds the agency business has benefited from the past two years facing more difficult comparisons moving forward.
