NUF’s 1H21 result materially beat expectations as sales occurred earlier than normal given favourable operating conditions and COVID uncertainty/supply chain disruptions. The strong result (EBITDA up 118% on pcp) was led by its ANZ, Europe and Seed Technologies businesses which benefited from much improved operating conditions. NUF also benefitted from its Performance Improvement Program (PIP), which is lowering its cost base. While earnings will be materially skewed to the 1H, we have upgraded our forecasts for the better-than-expected operating conditions and significantly lower D&A and interest guidance. With the stock undervalued based on an EV/EBITDA multiple, we maintain an Add rating with a new price target of A$6.50, implying 29% upside.
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