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Adecoagro SA (AGRO)
NYSE:AGRO
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Adecoagro SA
(NYSE:AGRO)64Neutral
Positive Factors
Ethanol Prices
Higher gasoline prices are supportive of hydrous ethanol prices, with ethanol prices up by 30% in one year.
Valuation and Tender Offer
Adecoagro received a proposal from Tether Investments to acquire a collective 51% stake in the company through tender offer at $12.41/sh - 26% premium.
Negative Factors
Operational Costs and Crop Results
Estimate flattish EBITDA in 2025 at US$447mn, down 8% from previous estimate due to weaker crop results and higher costs.
Adecoagro SA (AGRO) vs. S&P 500 (SPY)
Market Cap
$1.11B
Dividend Yield3.2%
Average Volume (3M)603.67K
Price to Earnings (P/E)7.1
Beta (1Y)0.27
Revenue Growth7.47%
EPS Growth10.22%
CountryUS
Employees9,762
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)1.51
Shares Outstanding104,134,810
10 Day Avg. Volume997,570
30 Day Avg. Volume603,671
Financial Highlights & Ratios
PEG Ratio0.69
Price to Book (P/B)N/A
Price to Sales (P/S)4.21
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.83Price Target Upside10.66% Upside
Rating ConsensusHold
Number of Analyst Covering3
Adecoagro SA Business Overview & Revenue Model
Company DescriptionAdecoagro SA (AGRO) is a leading agribusiness company operating primarily in South America, with key operations in Argentina, Brazil, and Uruguay. The company is engaged in the production of a diverse range of agricultural products, including crops such as soybeans, corn, and wheat, as well as dairy products and energy generation from renewable sources. Adecoagro focuses on sustainable farming practices and efficient resource management to maximize productivity and reduce environmental impact.
How the Company Makes MoneyAdecoagro SA generates revenue through several key streams. The primary source is the cultivation and sale of agricultural commodities such as soybeans, corn, and wheat. These crops are sold in domestic and international markets, providing a stable income base. Additionally, the company operates in the dairy sector, producing milk and related products for both local consumption and export. Another significant revenue stream comes from the company's renewable energy division, which includes the production of ethanol and electricity from sugarcane. Adecoagro benefits from strategic partnerships and favorable market conditions in the South American agricultural sector, contributing to its financial performance.
Adecoagro SA Financial Statement Overview
Summary
Adecoagro SA's financials are stable with improved net profit margins and ROE, but face challenges with high leverage and declining free cash flow. Revenue inconsistency and cash flow stress are concerns, yet the company maintains a solid financial position.Income Statement
The income statement shows moderate performance with a stable gross profit margin and EBIT margin. The net profit margin has seen improvement, indicating better profitability. However, revenue growth has been inconsistent, with a slight decrease in the most recent TTM period compared to the prior year.70
Positive
Balance Sheet
The balance sheet reflects a stable equity ratio, indicating a balanced capital structure. However, the debt-to-equity ratio is relatively high, suggesting increased leverage, which could pose risks if not managed properly. Return on equity has improved, which is a positive sign of shareholder value creation.65
Positive
Cash Flow
Cash flow analysis reveals a decline in free cash flow, mainly due to reduced operating cash flow and increased capital expenditures. The operating cash flow to net income ratio remains healthy, but the free cash flow to net income ratio has weakened, indicating potential for cash flow stress.60
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.35B | 1.30B | 1.35B | 1.12B | 817.76M | 887.14M | Gross Profit |
| 361.01M | 415.39M | 465.63M | 484.25M | 335.55M | 286.38M | EBIT |
| 142.81M | 241.56M | 249.80M | 278.02M | 189.05M | 213.60M | EBITDA |
| 429.67M | 561.06M | 397.65M | 453.24M | 245.45M | 281.96M | Net Income Common Stockholders |
| 158.17M | 226.29M | 108.14M | 130.67M | 1.07M | 342.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 339.78M | 339.78M | 230.65M | 199.77M | 336.28M | 290.28M | Total Assets |
| 3.16B | 3.16B | 3.11B | 2.58B | 2.48B | 2.52B | Total Debt |
| 1.28B | 1.28B | 1.35B | 1.06B | 1.17B | 1.18B | Net Debt |
| 943.68M | 943.68M | 1.12B | 864.74M | 830.58M | 894.39M | Total Liabilities |
| 1.90B | 1.90B | 1.95B | 1.53B | 1.52B | 1.49B | Stockholders Equity |
| 1.23B | 1.23B | 1.13B | 1.01B | 925.04M | 988.27M |
| Cash Flow | Free Cash Flow | ||||
| 8.27M | 191.48M | 139.80M | 135.66M | 80.14M | 56.09M | Operating Cash Flow |
| 230.20M | 434.91M | 370.03M | 348.66M | 257.13M | 322.11M | Investing Cash Flow |
| -202.26M | -173.67M | -299.26M | -175.22M | -121.92M | -248.71M | Financing Cash Flow |
| -304.64M | -153.27M | -23.57M | -303.13M | -53.92M | -37.86M |
Adecoagro SA Technical Analysis
Positive
10.69
Price Trends
9.87
Positive
10.46
Positive
10.27
Positive
Market Momentum
0.27
Negative
66.13
Neutral
67.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGRO, the sentiment is Positive. The current price of 10.69 is above the 20-day moving average (MA) of 10.22, above the 50-day MA of 9.87, and above the 200-day MA of 10.27, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 66.13 is Neutral, neither overbought nor oversold. The STOCH value of 67.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGRO.
Adecoagro SA Risk Analysis
Adecoagro SA disclosed 73 risk factors in its most recent earnings report. Adecoagro SA reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Adecoagro SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $21.13B | 20.01 | 5.69% | 3.20% | 1.27% | ― | |
71 Outperform | $4.34B | 6.89 | 30.75% | 4.73% | 15.57% | 38.87% | |
65 Neutral | $9.94B | 9.28 | 11.47% | 3.79% | -10.78% | -45.77% | |
64 Neutral | $1.11B | 7.08 | 11.33% | 3.20% | 7.47% | 10.22% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
60 Neutral | $22.34B | 12.76 | 8.12% | 4.32% | -9.01% | -43.53% | |
53 Neutral | $726.16M | ― | 11.27% | 8.96% | -3.06% | -124.82% |
* Consumer Defensive Sector Average
Performance Comparison
AGRO
Adecoagro SA
10.69
0.98
10.09%
ADM
Archer Daniels Midland
45.82
-5.69
-11.05%
BG
Bunge Global
71.70
-16.96
-19.13%
CALM
Cal-Maine Foods
88.54
34.64
64.27%
CRESY
Cresud Sociedad
10.84
3.79
53.76%
TSN
Tyson Foods
60.50
8.50
16.35%
Adecoagro SA Earnings Call Summary
Earnings Call Date: Nov 13, 2024 | % Change Since: -4.89% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Neutral
Adecoagro demonstrated resilience by maintaining strong demand in its ethanol segment and expanding its rice business despite challenges in sugar production due to weather conditions. The company's strategic shareholder distribution and growth in biomethane production are positive indicators, although a decline in adjusted EBITDA and pressures from lower commodity prices present challenges.Highlights
Shareholder Distribution Commitment
Adecoagro committed $96 million to shareholder distribution, including $35 million in cash dividends and $61 million in share repurchases.
Sugar, Ethanol & Energy Business Performance
Despite challenging weather, the sugar mix reached 55% during the quarter, and a slight year-over-year increase in crushing is expected, signaling a new record in sugar production.
ESG and Biomethane Production
Secured financing from FINEP to construct 2 biodigesters to increase biomethane production 5x by 2027, reducing carbon emissions and costs.
Rice Segment Growth
Adjusted EBITDA for the Rice segment reached a record of $51 million due to year-over-year gains in biological assets and increased planting areas.
Strong Demand for Ethanol
Ethanol demand remains high with parity at the pump around 65%, favoring ethanol consumption over gasoline.
Lowlights
Decline in Adjusted EBITDA
Adjusted EBITDA declined by 29% compared to the prior year quarter, primarily due to an uneven comparison from a farm sale in 2023.
Challenges in Sugar, Ethanol & Energy Operations
Lower results in this segment were partly due to a 10% year-over-year decline in crushing volumes because of dry weather conditions.
Lower International Prices and Higher Costs
Crops segment faced lower international prices and higher costs in US dollar terms, impacting overall results.
Company Guidance
During the Adecoagro Q3 2024 earnings call, the company provided guidance highlighting several key metrics. The management team, led by CEO Mariano Bosch, emphasized their commitment to shareholder distribution, having allocated $96 million, including $35 million in cash dividends and $61 million in share repurchases. Consolidated adjusted EBITDA for the quarter reached $111 million, while the year-to-date figure stood at $341 million. In terms of business segments, the Sugar, Ethanol & Energy division reported a 55% sugar mix and projected a slight year-over-year increase in crushing volume, despite challenging weather conditions. The Rice operations achieved record results, and the Dairy segment's focus on efficiency and higher value-added products drove growth. The company also outlined capital expenditures of $72 million year-to-date, with significant investments in expanding sugarcane plantations and biomethane production, reflecting IRRs between 18% to 25%. Additionally, Adecoagro maintained a net debt of $646 million, a 9% decrease from the previous year, and a liquidity ratio of 2.6x, underscoring its robust financial position.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.