GrainCorp's Valuation Hinges on a Normalized Year

GrainCorp enjoys significant market shares in grain storage, handling, and port elevation services along the eastern seaboard of Australia. Earnings are heavily affected by seasonal conditions, but diversification into oilseed crushing and refining reduces earnings volatility and provides growth opportunities. But we don't think the firm has carved an economic moat, and forecast returns on invested capital to trail the cost of capital over the long term.