Bunge Limited (BG) has been rated "Neutral" by Citi, with a revised price target of $76, down from $86, following a Q4 EPS miss and a 2025 EPS outlook below consensus. The report highlights a challenging start to 2025, with weak processing margins in North and South America, but anticipates improvement later in the year, driven by biofuels incentives and seasonal factors. Citi has adjusted its 2025 EPS estimate to $7.86 from $8.53, reflecting weaker near-term margins and reduced share repurchases until the Viterra acquisition closes.
The report notes that Bunge's 2025 EPS guidance of $7.75 is below its mid-cycle expectation of $8.50, with lower volumes due to geopolitical disruptions and higher operational costs. The Viterra acquisition, expected to close soon, could lead to year-one dilution rather than accretion, with Citi estimating a ~$1.30 EPS impact. "The elevated level of capex spending over the next few years will likely weigh on BG’s free cash flow," Citi states, adding that the Viterra deal might not be as EPS accretive as initially thought.
Bunge's stock was trading at $70.75, down 5.69% on February 5, at 2:10 PM.