GrainCorp Earnings: Earnings on Par With Expectations; Securities Remain Overvalued

At current prices, no-moat GrainCorp looks overvalued. GrainCorp’s underlying EBITDA of AUD 164 million for the first half of fiscal 2024 was no surprise, given it was practically reported last week. This was less than half the previous corresponding period, which enjoyed a bumper crop and exceptional supply chain margins. We continue to expect a more challenging second half and make no changes to our forecasts. In our view, this is a more normalized year for GrainCorp. We maintain our AUD 7.40 per share fair value estimate with long-term forecasts based on normalized crop production and conditions.