Morningstar

Graincorp Ltd Class A GNC

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Stock XASX Rating as of
A$8.97 −0.07 (0.77%)
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As of Delayed Price Open

Company Report

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GrainCorp: Bumper Crop Expected in 2025, but Supply Chain Margins Aren't as Lucrative

Angus Hewitt

The September revision of the crop report from the Australian Department of Agriculture, Fisheries and Forestry forecasts 2025 east coast winter grain production of about 29 million metric tons. This is a 25% increase from 2024 and significantly higher than the 10-year average of about 22 million metric tons. Conditions are favorable following high levels of soil moisture at the time of planting, good rainfall since, and the climate outlook from the Bureau of Meteorology pointing to likely above-average rainfall for most crop regions. We adjust our earnings forecasts accordingly and lift our fiscal 2025 EBITDA forecast by 11% to AUD 312 million. We lift our fair value estimate by 7% to AUD 7.90 per share, with about half of the increase due to the time value of money.

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Price vs Fair Value

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GNC is trading at a 645% premium.
Price
A$9.04
Fair Value
A$9.70
Uncertainty
Medium
1-Star Price
A$13.56
5-Star Price
A$1.76
Economic Moat
Lbw
Capital Allocation
Psffhclnw

Bulls Say, Bears Say

Bulls

With strategic processing, storage, and transportation assets, GrainCorp's size gives the company scale advantages over regional competitors.

Bears

Despite positive long-run themes, earnings and returns on invested capital can be quite volatile, given exposure to annual weather events.

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Trading Information

Previous Close Price
A$9.04
Day Range
A$8.97–9.09
52-Week Range
A$6.71–9.35
Bid/Ask
A$8.97 / A$8.98
Market Cap
A$2.01 Bil
Volume/Avg
112,752 / 643,565

Key Statistics

Price/Earnings (Normalized)
8.64
Price/Sales
0.29
Dividend Yield (Trailing)
3.10%
Dividend Yield (Forward)
3.10%
Total Yield
3.10%

Company Profile

GrainCorp is an agribusiness with an integrated business model operating across three divisions. The company operates the largest grain storage and logistics network in eastern Australia. GrainCorp provides grain marketing services to all major grain-producing regions in Australia, as well as to Canadian and UK growers. The company has also diversified into edible oil refining and supply and bulk liquid storage.
Sector
Consumer Defensive
Industry
Farm Products
Stock Style Box
Small Growth
Total Number of Employees
2,380
Website
https://www.graincorp.com.au

Competitors

Valuation

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Metric
GNC
ADM
Price/Earnings (Normalized)
 8.6410.83
Price/Book Value
 1.291.28
Price/Sales
 0.290.35
Price/Cash Flow
 5.597.84
Price/Earnings
GNC
ADM

Financial Strength

Metric
GNC
ADM
Quick Ratio
 0.690.38
Current Ratio
 1.561.44
Interest Coverage
 2.585.10
Quick Ratio
GNC
ADM

Profitability

Metric
GNC
ADM
Return on Assets (Normalized)
 −0.50%5.24%
Return on Equity (Normalized)
 −1.21%11.94%
Return on Invested Capital (Normalized)
 0.51%8.67%
Return on Assets
GNC
ADM

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