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Adecoagro SA (AGRO)
NYSE:AGRO
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Adecoagro SA
(NYSE:AGRO)
61Neutral
Positive Factors
Company Structure Stability
Tether Investments plans to maintain Adecoagro's main executives and business structure, reducing the risk of disruptive changes in the company.
Governance and Oversight
Adecoagro's new Board of Directors must include at least three independent members, ensuring checks on third-party transactions.
Strategic Focus on Sustainability
Tether's commitment to investing in sustainable, future-oriented companies that have a deep impact on real-world economies.
Negative Factors
Earnings Outlook
Earnings momentum is uninspiring with a flat EBITDA forecasted for the coming year.
Liquidity Concerns
Liquidity likely reduced as the free float will go to 30%.
Market Performance Uncertainty
Shares are unlikely to outperform without clarity on controlling shareholder's intentions.
Adecoagro SA (AGRO) vs. S&P 500 (SPY)
Market Cap
$917.94M
Dividend Yield3.66%
Average Volume (3M)1.39M
Price to Earnings (P/E)10.2
Beta (1Y)0.03
Revenue Growth18.45%
EPS Growth-57.55%
CountryUS
Employees8,896
SectorConsumer Defensive
Sector Strength82
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)0.90
Shares Outstanding99,993,160
10 Day Avg. Volume1,758,888
30 Day Avg. Volume1,388,615
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.01
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit5.11
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.23Price Target Upside15.99% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
Adecoagro SA Business Overview & Revenue Model
Company DescriptionAdecoagro S.A. operates as an agro-industrial company in South America. It engages in farming crops and other agricultural products, dairy operations, and land transformation activities, as well as sugar, ethanol, and energy production activities. The company is involved in the planting, harvesting, and sale of grains and oilseeds, as well as wheat, corn, soybeans, peanuts, cotton, sunflowers, and others; provision of grain warehousing/conditioning, handling, and drying services to third parties; and purchase and sale of crops produced by third parties. It also plants, harvests, processes, and markets rice; and produces and sells raw milk, UHT, cheese, powder milk, and others. In addition, the company engages in the cultivating, processing, and transforming of sugarcane into ethanol and sugar; and the sale of electricity cogenerated at its sugar and ethanol mills to the grid. Further, it is involved in the identification and acquisition of underdeveloped and undermanaged farmland, and the realization of value through the strategic disposition of assets. As of December 31, 2021, the company owned a total of 219,850 hectares of land, including 18 farms in Argentina, 8 farms in Brazil, and 1 farm in Uruguay, as well as a total of 241 megawatts of installed cogeneration capacity. Adecoagro S.A. was founded in 2002 and is based in Luxembourg, Luxembourg.
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
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.65
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
8.82
Price Trends
10.79
Negative
10.33
Negative
10.54
Negative
Market Momentum
-0.46
Positive
26.95
Positive
7.91
Positive
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 8.82 is below the 20-day moving average (MA) of 10.62, below the 50-day MA of 10.79, and below the 200-day MA of 10.54, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 26.95 is Positive, neither overbought nor oversold. The STOCH value of 7.91 is Positive, 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.60B | 10.93 | 7.51% | 3.12% | -0.69% | ― | |
68 Neutral | $369.05M | 7.11 | 13.83% | 6.72% | -8.21% | -1.83% | |
68 Neutral | $1.43B | 11.39 | 12.14% | 2.14% | 2.79% | -13.96% | |
64 Neutral | $8.88B | 14.97 | 4.63% | 174.27% | 3.67% | 4.40% | |
61 Neutral | $917.94M | 10.20 | 7.11% | 3.66% | 18.45% | -57.55% | |
60 Neutral | $286.56M | 38.24 | 4.34% | 1.93% | 2.39% | ― | |
44 Neutral | $80.07M | ― | -12.88% | ― | 17.71% | -10.34% |
* Consumer Defensive Sector Average
Performance Comparison
AGRO
Adecoagro SA
8.82
-1.95
-18.11%
FDP
Fresh Del Monte Produce
33.40
9.76
41.29%
LMNR
Limoneira Co
15.88
-5.80
-26.75%
VFF
Village Farms International
0.71
-0.63
-47.01%
LND
BrasilAgro Cia Brasileira de Propriedades Agricolas
3.66
-1.14
-23.75%
DOLE
Dole
14.97
2.81
23.11%
Adecoagro SA Earnings Call Summary
Earnings Call Date:Mar 13, 2025
(Q4-2024)
| % Change Since: -17.72%|
Next Earnings Date:May 12, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong operational performance in key segments like sugar, rice, and dairy, supported by effective cost management and strategic investments. However, challenges such as the decline in sugar prices and weather impacts on sugarcane yields posed significant obstacles. The positive outlook for ethanol and increased shareholder returns provided a balanced view against the revenue decline and ongoing uncertainties with the Tether proposal.Q4-2024 Updates
Positive Updates
Record-Breaking Sugar Production
Achieved a new crushing record and a record in total sugar produced with a sugar mix of 52.2% and 832,000 tons.
Strong Performance in Rice and Dairy
Rice and dairy operations reported record results with significant recovery in yields and higher selling prices.
Increased Shareholder Distribution
Distributed $102 million in 2024, which is $32 million more than the distribution policy, without compromising debt or growth projects.
Positive Ethanol Market Outlook
Strong demand for ethanol due to low parity at the pump versus gasoline, leading to a favorable price scenario.
Improvement in Cash Cost
Cash costs amounted to 12.7 cents per pound of sugar equivalent, 8% lower than the prior year.
Negative Updates
Quarterly Revenue Decline
Gross sales totaled $368 million during the fourth quarter, a quarterly drop despite a 2% annual increase.
Impact of Weather on Sugarcane Yields
The dry weather in 2024 led to reduced yields although the company managed to maintain production levels.
Decline in Sugar Prices
Global sugar prices decreased from record levels in 2023, impacting revenues despite high production.
Challenges in Crop Segment
Adjusted EBITDA for the crops segment was negative $3 million for the fourth quarter due to lower international prices and higher costs.
Uncertainty Over Tether Proposal
Ongoing discussions with Tether Investments to acquire a majority stake, adding uncertainty to the company's future.
Company Guidance
During Adecoagro's Fourth Quarter 2024 Results Conference Call, several key metrics and guidance were discussed. The company reported a consolidated adjusted EBITDA of $103 million for the quarter and $444 million for the year, reflecting an 8% year-over-year increase. Gross sales for the fourth quarter totaled $368 million, with annual revenues reaching nearly $1.5 billion, a 2% increase from the previous year. Despite a challenging year for crop operations due to uneven weather conditions, the company achieved record results in its rice and dairy segments, as well as operational records in sugar, ethanol, and energy production. A significant highlight was the increase in sugar production, with a sugar mix of 52.2% leading to a production of 832,000 tons. The company also mentioned its strategy to sell 31% of its 2024 ethanol production and the continued investment in cane expansion and biomethane production. Additionally, Adecoagro distributed $102 million in 2024 between dividends and share buybacks, surpassing its distribution policy by $32 million. For 2025, they plan to distribute at least $64 million based on $161 million in net cash from operations. Finally, the company's net debt stood at $522 million, with a net leverage ratio of 1.2 times, and they invested $104 million in expansion projects throughout the year.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.