Morgan Stanley analyst Julia Rizzo maintained a Sell rating on Adecoagro SA today and set a price target of $9.50.
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Julia Rizzo’s rating is based on Adecoagro SA’s recent strategic decision to acquire a significant stake in Profertil, which poses several financial risks. The company plans to finance this acquisition through a combination of existing cash, long-term credit, and equity issuance, which is expected to significantly increase its net debt levels. This move could elevate the company’s leverage ratio to a point that may be considered beyond optimal levels, potentially impacting its financial stability.
Furthermore, while the acquisition aims to enhance Adecoagro’s market position by increasing its ownership in Profertil to 90%, the total investment of approximately $1.1 billion is substantial compared to Adecoagro’s current market capitalization. This financial strain, coupled with the potential for increased debt, suggests a cautious outlook on Adecoagro’s stock performance, leading to the Sell rating by Julia Rizzo.
According to TipRanks, Rizzo is ranked #7065 out of 10052 analysts.
In another report released on November 30, J.P. Morgan also downgraded the stock to a Sell with a $7.00 price target.