Favourable Megatrends See No Change to Outlook for No-Moat Nufarm

We make no change to our AUD 7 fair value estimate for no-moat Nufarm. The Australian crop protection business hasn’t provided an update to the outlook since release of the fiscal half-year results in May 2022. At that time, it reported a 120% increase in underlying first-half fiscal net profit after tax to AUD 133 million, but said industry conditions were highly favourable and that there was likely to be some easing in agricultural commodity prices from elevated levels. It expected the normal seasonal skew of earnings to the fiscal first half to be even more pronounced than the 67:33 half-to-half split in fiscal 2021, due to the extraordinarily favourable fiscal first half. We retain our assumed 71:29 half-to-half underlying EBITDA split for fiscal 2022. And our fiscal 2022 EPS forecast is little changed at AUD 0.36.