Broking house Morgans has released new research reports on two companies, which it says will increase in value by almost a third over the next 12 months.
Let's see who they like.
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Nufarm Ltd (ASX: NUF)
Morgans writes in its research note on the food sector that conditions are ripening for soft commodities to perform well, with two "genuine supply shocks" hitting the sector.
The broker said world food prices rose for a third straight month in August, heading close to a four-year high, but still 17% below the March 2022 peak.
Part of the reason includes Russia and Ukraine attacking each other's Black Sea ports, with Russian exports at their lowest since 2016, and Ukraine's at a 16-year low, Morgans said.
Also impacting prices were drought conditions which had affected wheat output globally, "and there appears near-certain odds on El Niño running through to February 2027''.
Morgans said Nufarm was their top pick in the agricultural sector.
They added:
The new management team continues to turn the business around and are ungearing the balance sheet, with the focus on quality of earnings. 1H26 came in at the upper end of guidance, setting up strong FY26 EBITDA growth on normal seasonal conditions. Investor Days on 28-29 September are the next catalyst.
Morgans has a $4.15 price target on Nufarm shares compared to $3.16 at the time of writing.
If achieved, this would be a 31.3% return. Nufarm is valued at $1.25 billion.
SGH Ltd (ASX: SGH)
Morgans has actually downgraded its price target for SGH shares, but is still predicting a 31.3% return.
The downgrade has come about as a result of SGH's 30% shareholding in Beach Energy Ltd (ASX: BPT) and negative earnings revisions from Beach in a report in early August.
Morgans said:
SGH is an industrial compounder with a decade-long record of EBIT growth, underpinned by three market-leading businesses exposed to durable Australian thematics: 1) mining production (WesTrac), 2) infrastructure/construction (Boral, Coates), and 3) Transitional Energy. The key investment thesis rests on continued margin improvement at Boral, operating leverage across a largely fixed-cost industrial asset base, and disciplined capital recycling at a 15% return on capital employed hurdle.
Morgans said that with the balance sheet deleveraging, debt capacity was rebuilding for another potential acquisition.
Morgans has a buy rating on SGH shares with a price target of $48, down from $50.
SGH is valued at $14.9 billion. Beach Energy shares are currently 25.2% lower over a 12-month period.
