Graincorp Ltd Class A

GNC: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$7.50	Dtjp	Vljmnsr

East Coast Australian Grain Production: Wetter Is Better for GrainCorp, but Shares Fairly Valued

Adam Fleck

Jun 10, 2020

Crop growing conditions across east-coast Australia are shaping up to be the best in several years, which should benefit no-moat GrainCorp. The Australian Bureau of Agricultural and Resource Economics, or ABARES, reiterated its growth projections for the 2019-20 growing season in its June update, and offered optimism for even stronger growth in 2020-21. While the weather will ultimately determine the accuracy of these forecasts, we’ve slightly increased our revenue and earnings forecasts for GrainCorp’s fiscal 2021. However, we maintain our AUD 4.30 per share fair value estimate, which is primarily based on our unchanged midcycle assumptions.

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