Analyst Note| Seth Goldstein, CFA |
Bunge reported strong third-quarter results, as adjusted core segment EBIT was up 20% year on year versus the prior-year quarter. The growth was driven by higher agribusiness and refined and specialty oils results. We have increased our near-term outlook for the agribusiness segment, as we expect favorable grain merchandising conditions will remain in place throughout much of 2022. However, we expect 2021 will represent a cyclical peak for the business, and our long-term outlook remains intact. After updating our model to reflect these changes, we’ve increased our fair value estimate for Bunge to $75 per share from $74. Our no-moat rating is unchanged.