Morgan Stanley analyst Julia Rizzo downgraded the rating on Adecoagro SA (AGRO – Research Report) to a Sell today, setting a price target of $10.00.
Julia Rizzo has given her Sell rating due to a combination of factors impacting Adecoagro SA’s stock. The recent tender offer by Tether Investments, which was significantly oversubscribed, has resulted in Tether owning approximately 70% of Adecoagro. This substantial control by Tether introduces uncertainty regarding the future intentions of the controlling shareholder, which could affect the company’s strategic direction.
Furthermore, Rizzo has reduced the price target to $10, reflecting a higher holding discount due to anticipated lower share liquidity. Despite the company’s quality assets, healthy free cash flow, and solid balance sheet, the lack of clarity on Tether’s plans makes it unlikely for the shares to outperform the market. Additionally, there are expectations of weak upcoming results due to adverse weather conditions impacting agricultural yields and pressure on ethanol prices.
In another report released on April 25, Bank of America Securities also downgraded the stock to a Sell with a $10.80 price target.