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Highlights:
- Canaccord Genuity lPrice target reduced: Canaccord Genuity lowered Wynnstay’s target price from 520.0p to 470.0p due to struggles in its feed and fertiliser divisions.
- Mixed performance: While feed and fertiliser underperformed, Wynnstay’s arable and agri-merchanting units met or exceeded expectations.
- Long-term outlook positive: Canaccord expects better conditions in 2025 and maintains a 'buy' rating, believing the stock remains undervalued.owers target price on Wynnstay
Canaccord Genuity has lowered its price target for agricultural business Wynnstay (LSE:WYN) from 520.0p to 470.0p, citing the group's struggles with difficult market conditions. The Canadian bank highlighted challenges within Wynnstay’s feed and fertiliser divisions as key factors behind the reduced outlook but maintained a positive long-term view on the stock.
Wynnstay, which had previously announced that its fiscal year 2024 (FY24) performance would fall short of internal expectations, pointed to underperformance in its feed division and fertiliser blending unit at Glasson Grain as primary drivers of the downturn. Although pricing pressures played a role, Canaccord suggested that lower demand was largely the result of cautious farmer sentiment following significant losses in 2023 caused by extreme weather conditions, including heavy rainfall.
Despite these setbacks, Canaccord noted that other areas of Wynnstay’s operations remained resilient. The arable division performed in line with expectations, and the agri-merchanting arm even slightly outperformed. This balanced performance across segments provided some optimism for the group's future, though Canaccord expressed caution regarding the final results for 2024.
Looking ahead, the analysts expect conditions to stabilize in 2025, assuming more favorable weather patterns. Canaccord reiterated its ‘buy’ rating, underscoring its belief that Wynnstay remains undervalued given its asset-backed nature and strong cash generation capabilities.
The second half of 2024 has proven particularly challenging for Wynnstay, but Canaccord remains confident in the company’s ability to navigate adversity and deliver long-term value.
