Adecoagro SA (AGRO) AI Stock Analysis

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Adecoagro SA

(NYSE:AGRO)

Rating:64Neutral

Price Target:

$9.50

▲( 0.00% Upside)

Adecoagro SA's overall stock score reflects a challenging financial environment with declining profitability and cash flow issues, despite solid revenue growth. Technical indicators suggest bearish momentum, although the company's attractive valuation and strategic support from Tether provide potential for improvement. The mixed earnings call sentiment suggests cautious optimism moving forward.

Positive Factors

Corporate Governance

Adecoagro's new Board of Directors must include at least three independent members, ensuring checks on third-party transactions.

Management Stability

Tether Investments plans to maintain Adecoagro's main executives and business structure, reducing the risk of disruptive changes in the company.

Tender Offer

Tether's tender offer to acquire Adecoagro shares includes a 9% premium to the current stock price.

Negative Factors

Liquidity and Valuation

Reducing estimates & cutting PT to $10 after incorporating higher holding discount on likely lower share liquidity and lack of visibility on new controller's intentions.

Strategic Uncertainty

The uncertainty regarding the long-term strategy of Tether Investments as the controlling shareholder brings risk to the thesis.

Weather Impact

A set of weak results is anticipated due to uneven weather affecting both cane yields and crops, and downside pressure on ethanol prices.

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

Market Cap

$949.93M

Dividend Yield3.6%

Average Volume (3M)1.09M

Price to Earnings (P/E)15.2

Beta (1Y)-0.05

Revenue Growth17.05%

EPS Growth-73.53%

CountryUS

Employees8,896

SectorConsumer Defensive

Sector Strength75

IndustryAgricultural Farm Products

Share Statistics

EPS (TTM)-0.09

Shares Outstanding99,993,160

10 Day Avg. Volume607,297

30 Day Avg. Volume1,089,602

Financial Highlights & Ratios

PEG Ratio-1.19

Price to Book (P/B)3.27

Price to Sales (P/S)0.00

P/FCF Ratio71.23

Enterprise Value/Market Cap5.67

Enterprise Value/Revenue1.02

Enterprise Value/Gross Profit23.07

Enterprise Value/Ebitda2.85

Forecast

1Y Price Target

$9.80

Price Target Upside3.16% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering3

Adecoagro SA Business Overview & Revenue Model

Company DescriptionAdecoagro SA is a leading agro-industrial company operating in South America, primarily within Argentina, Brazil, and Uruguay. The company is engaged in the production of a wide range of agricultural products, including crops, dairy, sugar, ethanol, and energy. By integrating farming, industrial processing, and logistics, Adecoagro effectively manages the entire value chain of its products, ensuring quality and efficiency across its operations.

How the Company Makes MoneyAdecoagro SA generates revenue through several key streams. Its primary sources of income include the cultivation and sale of agricultural commodities such as soybeans, corn, wheat, and rice. Additionally, the company has substantial operations in sugar and ethanol production, where it processes sugarcane into sugar and biofuels, capitalizing on the growing demand for renewable energy sources. The dairy business contributes by producing and selling milk and related products. Furthermore, Adecoagro benefits from its energy segment, which involves the generation and sale of electricity, primarily from biomass sources, enhancing its revenue through sustainable energy solutions. Strategic partnerships and a focus on operational efficiency across its diversified portfolio play significant roles in driving the company’s profitability.

Adecoagro SA Financial Statement Overview

Summary

Adecoagro SA's financial performance presents a mixed picture. While revenue growth is strong, declines in profit margins and return on equity raise concerns about profitability and efficiency. The balance sheet is relatively stable with moderate leverage, but cash flow challenges, particularly in free cash flow, highlight potential liquidity issues. The company needs to focus on improving cost efficiency and cash generation to bolster overall financial health.

Income Statement

Positive

Adecoagro SA shows a mixed performance in its income statement. The gross profit margin for 2024 was 23.8%, down from 32% in 2023, indicating a reduction in cost efficiency. The net profit margin decreased to 6.1% from 17.4%, reflecting a significant drop in bottom-line profitability. However, revenue grew by 16.9% from 2023 to 2024, showing positive sales momentum. The EBIT and EBITDA margins were 12% and 28% respectively, both experiencing declines, suggesting pressure on operating profitability.

Balance Sheet

Positive

The balance sheet reflects a stable yet leveraged structure. The debt-to-equity ratio for 2024 stood at 0.82, indicating a moderate level of financial leverage. Return on equity decreased to 6.7% from 18.4%, which may concern investors. However, the equity ratio improved to 43.9% in 2024, showing strengthened equity financing.

Cash Flow

Neutral

Adecoagro's cash flow statement reveals some challenges. The free cash flow decreased significantly by 65.4% from 2023 to 2024, indicating reduced cash generation after capital expenditures. The operating cash flow to net income ratio was robust at 3.56, suggesting strong cash generation relative to net income. However, the free cash flow to net income ratio is just 0.72, reflecting weaker cash retention after investments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.52B	1.30B	1.35B	1.12B	817.76M
	Gross Profit
361.51M	415.39M	465.63M	484.25M	335.55M
	EBIT
182.30M	241.56M	249.80M	278.02M	189.05M
	EBITDA
426.38M	561.06M	397.65M	453.24M	245.45M
	Net Income Common Stockholders
92.34M	226.29M	108.14M	130.67M	1.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
211.24M	339.78M	230.65M	199.77M	336.28M
	Total Assets
3.11B	3.16B	3.11B	2.58B	2.48B
	Total Debt
1.12B	1.28B	1.35B	1.06B	1.17B
	Net Debt
910.34M	943.68M	1.12B	864.74M	830.58M
	Total Liabilities
1.71B	1.90B	1.95B	1.53B	1.52B
	Stockholders Equity
1.37B	1.23B	1.13B	1.01B	925.04M
Cash Flow		Free Cash Flow
66.19M	191.48M	139.80M	135.66M	80.14M
	Operating Cash Flow
328.33M	434.91M	370.03M	348.66M	257.13M
	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

Negative

Last Price9.50

Price Trends

50DMA

10.27

Negative

100DMA

10.16

Negative

200DMA

10.53

Negative

Market Momentum

MACD

-0.25

Negative

RSI

48.76

Neutral

STOCH

91.55

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGRO, the sentiment is Negative. The current price of 9.5 is above the 20-day moving average (MA) of 9.05, below the 50-day MA of 10.27, and below the 200-day MA of 10.53, indicating a neutral trend. The MACD of -0.25 indicates Negative momentum. The RSI at 48.76 is Neutral, neither overbought nor oversold. The STOCH value of 91.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	76 Outperform	$1.65B	11.25	7.51%	3.05%	-0.64%	―
DOLE	69 Neutral	$1.33B	14.19	8.87%	2.29%	0.91%	-49.71%
LND	68 Neutral	$373.86M	6.53	15.25%	6.65%	1.09%	21.46%
Sector *	64 Neutral	$8.82B	14.56	4.78%	173.92%	3.50%	2.20%
AGRO	64 Neutral	$949.93M	15.17	4.51%	3.60%	17.05%	-73.53%
LMNR	62 Neutral	$277.17M	36.99	4.34%	1.95%	2.39%	―
VFF	58 Neutral	$139.30M	―	-14.58%	―	12.09%	-40.10%

* Consumer Defensive Sector Average

Performance Comparison

AGRO

Adecoagro SA

9.50

-0.27

-2.76%

FDP

Fresh Del Monte Produce

34.43

12.09

54.12%

LMNR

Limoneira Co

15.36

-4.68

-23.35%

VFF

Village Farms International

1.24

0.06

5.08%

LND

BrasilAgro Cia Brasileira de Propriedades Agricolas

3.85

-0.76

-16.49%

DOLE

Dole

13.99

1.92

15.91%

Adecoagro SA Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 8.08%|

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.

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.