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Adecoagro SA (AGRO)
NYSE:AGRO
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Adecoagro SA (AGRO) AI Stock Analysis

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AGRO

Adecoagro SA

(NYSE:AGRO)

Rating:68Neutral
Price Target:
$10.00
▲(5.71%Upside)
Adecoagro SA's overall stock score is driven by its stable financial performance and strategic developments, such as Tether's 70% stake acquisition. Despite these positives, the company faces significant challenges, including a substantial decline in EBITDA and production issues in the sugar, ethanol, and energy segments. Technical indicators suggest cautious short-term momentum, and valuation metrics are reasonable but not compelling. The stock is positioned for potential improvement, contingent on resolving current operational challenges and leveraging new investments.
Positive Factors
Financial performance
Sugar prices are anticipated to recover from current depressed levels, which could benefit the company's financial performance if the outcome of the frosts is favorable.
Operational stability
Tether Investments plans to maintain Adecoagro's main executives and business structure, reducing the risk of disruptive changes in the company.
Negative Factors
Financial outlook
The company's EBITDA and free cash flow estimates have been significantly reduced due to unfavorable weather conditions and declining sugar prices.
Shareholder uncertainty
The uncertainty regarding the long-term strategy of Tether Investments as the controlling shareholder brings risk to the thesis.
Weather impact
Adverse weather events, including frosts and heavy rainfall, are expected to negatively impact Adecoagro's sugarcane crop outlook.

Adecoagro SA (AGRO) vs. SPDR S&P 500 ETF (SPY)

Adecoagro SA Business Overview & Revenue Model

Company DescriptionAdecoagro SA (AGRO) is a leading agricultural company operating primarily in South America, with a focus on Argentina, Brazil, and Uruguay. The company engages in the production of a diverse range of agricultural products, including crops, dairy products, sugar, ethanol, and energy. Adecoagro is involved in the entire value chain, from planting and harvesting to processing and marketing, leveraging its vast land holdings and integrated operations to maximize efficiency and productivity.
How the Company Makes MoneyAdecoagro makes money through its diversified portfolio of agricultural activities. The company's key revenue streams include the sale of crops such as soybeans, corn, and wheat, which are major contributors to its earnings. Additionally, Adecoagro generates revenue from its dairy operations by producing and selling milk and other dairy products. The sugar, ethanol, and energy business segments also play a significant role in the company's revenue model. Sugar is sold in domestic and international markets, while ethanol is produced for fuel and industrial uses. The company further capitalizes on its expertise in energy generation by producing electricity from renewable sources, such as biomass. Partnerships with local and international distributors, along with operational efficiencies, contribute to Adecoagro's profitability.

Adecoagro SA Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 7.62%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a complex scenario where Adecoagro faced significant challenges, particularly with a substantial decrease in EBITDA and issues in the farming segment. However, there were notable positive developments such as strategic progress with Tether's investment, record rice productivity, and strategic sales in ethanol. The outlook appears cautiously optimistic with new shareholder support, though immediate financial performance shows strain.
Q1-2025 Updates
Positive Updates
Tether Becomes Largest Shareholder
Tether completed its tender offer process, becoming the largest shareholder of Adecoagro with 70% equity. This marks a new era for the company with potential for new projects and innovations.
Record Rice Productivity
Adecoagro achieved a new record in rice productivity, attributed to investments in seed genetics, land laboring, and machinery.
Increased Sales and Strategic Ethanol Sales
Net sales totaled $324 million, a 28% increase year-over-year, with significant sales of ethanol at prices 31% higher compared to the previous year.
Positive Developments in Sugar and Ethanol Business
The company strategically sold ethanol at higher prices and expects to crush sugarcane at higher yields due to recent rains, potentially improving operations in the second half of the year.
Negative Updates
Significant EBITDA Decline
Consolidated adjusted EBITDA decreased by 60% year-over-year to $36 million due to lower prices and production in biological assets and one-off expenses related to the tender offer.
Decreased Crushing Volume
Crushing volume in the sugar, ethanol, and energy business was down 31% year-over-year, impacted by dry weather conditions.
Challenges in Farming Segment
The farming business reported a $27 million year-over-year decrease in adjusted EBITDA, driven by lower international prices, lower productivity, and higher costs.
Company Guidance
During Adecoagro's first quarter conference call for 2025, the company highlighted key financial metrics and strategic guidance. Consolidated adjusted EBITDA was reported at $36 million, marking a 60% year-over-year decrease, primarily due to losses in biological assets within the rice and sugar, ethanol, and energy segments. Net sales for the quarter totaled $324 million, up 28% year-over-year, driven by higher ethanol sales volumes despite lower commodity prices. The company noted a 31% year-over-year decline in crushing volume in their sugar, ethanol, and energy business due to dry weather. However, they anticipate an improvement in yields and productivity as the year progresses. Tether, now the largest shareholder with a 70% stake, plans to invest in Adecoagro's growth, exploring both organic and inorganic opportunities, while maintaining a disciplined capital allocation strategy. The company also reaffirmed its commitment to a minimum distribution of 40% of cash generated in 2024, with $64 million set for dividends and share repurchases.

Adecoagro SA Financial Statement Overview

Summary
Adecoagro SA displays stable financial performance with strong cash flow generation and operational efficiency. The EBIT and EBITDA margins are solid, reflecting competent management. However, challenges in enhancing net profitability and shareholder returns remain, with a moderate income statement and balance sheet performance.
Income Statement
72
Positive
Adecoagro SA shows a moderate financial performance with a solid Gross Profit Margin of 20.1% for TTM, reflecting stable profitability given its industry. The Net Profit Margin is at 4.0% for TTM, which is relatively low but consistent with agricultural sector norms. Revenue growth has been slow, with a modest increase of 3.2% from the previous year. However, the EBIT and EBITDA margins for TTM are 7.8% and 27.2%, respectively, indicating decent operational efficiency. The company faces challenges in improving net profitability despite steady revenues.
Balance Sheet
68
Positive
The balance sheet of Adecoagro SA reflects a stable financial position with a Debt-to-Equity Ratio of 0.90, suggesting manageable leverage levels. The Equity Ratio stands at 42.4% for TTM, which indicates a healthy proportion of equity financing, providing some cushion against liabilities. Return on Equity (ROE) is relatively low at 4.4% for TTM, highlighting the need for improved profitability. The company maintains a strong asset base, but its ability to generate returns is an area for improvement.
Cash Flow
75
Positive
Adecoagro SA's cash flow statements indicate robust cash generation with an Operating Cash Flow to Net Income Ratio of 5.6 for TTM, reflecting strong cash earnings relative to net income. The Free Cash Flow to Net Income Ratio is 1.63, demonstrating effective cash flow management. Free Cash Flow has shown impressive growth, increasing by 54.4% from the previous year, supporting the company's capacity to invest in growth and service debt. Overall, the cash flow position is solid, enhancing financial flexibility.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.52B1.30B1.35B1.12B817.76M
Gross Profit361.51M415.39M465.63M484.25M335.55M
EBITDA426.38M561.06M397.65M453.24M245.45M
Net Income92.34M226.29M108.14M130.67M1.07M
Balance Sheet
Total Assets3.11B3.16B3.11B2.58B2.48B
Cash, Cash Equivalents and Short-Term Investments211.24M339.78M230.65M199.77M336.28M
Total Debt1.12B1.28B1.35B1.06B1.17B
Total Liabilities1.71B1.90B1.95B1.53B1.52B
Stockholders Equity1.37B1.23B1.13B1.01B925.04M
Cash Flow
Free Cash Flow66.19M191.48M139.80M135.66M80.14M
Operating Cash Flow328.33M434.91M370.03M348.66M257.13M
Investing Cash Flow-231.56M-173.67M-299.26M-175.22M-121.92M
Financing Cash Flow-274.00M-208.74M-23.57M-303.13M-53.92M

Adecoagro SA Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price9.46
Price Trends
50DMA
9.31
Positive
100DMA
9.91
Negative
200DMA
10.19
Negative
Market Momentum
MACD
0.04
Negative
RSI
53.06
Neutral
STOCH
51.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGRO, the sentiment is Neutral. The current price of 9.46 is above the 20-day moving average (MA) of 9.35, above the 50-day MA of 9.31, and below the 200-day MA of 10.19, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 51.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$1.69B11.527.51%3.09%-0.64%
71
Outperform
$361.77M6.4515.25%1.56%1.09%21.46%
70
Outperform
$1.36B14.528.87%2.26%0.91%-49.71%
68
Neutral
$937.94M14.984.51%3.69%17.05%-73.53%
65
Neutral
$27.19B15.58-4.44%2.56%1.05%4.97%
63
Neutral
$158.40M-14.58%12.09%-40.10%
61
Neutral
$275.73M36.96-0.97%1.97%-0.94%0.47%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AGRO
Adecoagro SA
9.46
0.18
1.94%
FDP
Fresh Del Monte Produce
35.63
12.12
51.55%
LMNR
Limoneira Co
15.21
-6.58
-30.20%
VFF
Village Farms International
1.52
0.37
32.17%
LND
BrasilAgro Cia Brasileira de Propriedades Agricolas
3.77
-0.73
-16.22%
DOLE
Dole
14.41
0.21
1.48%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 25, 2025