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What Does Wall Street See ahead for Bunge?

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Target prices

Since we discussed Bunge’s (BG) earnings for 1Q16, Wall Street analysts have updated their target prices for the next 12 months. Their recommendations have also changed. Around 67% of analysts now rate Bunge as a “buy,” and 33% rate it as a “hold.” No analysts rate it as a “sell.”

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Analysts’ target prices for Bunge

The average broker target price for Bunge has risen slightly to $71.60 from $71.20. This represents a rise of 23% from the stock’s closing price of $58.12 on July 6, 2016. Its peers’ target prices and return potentials as of July 6 are as follows:

  • Archer Daniels Midland (ADM) has a target price of $42.67 and a return potential of 1%.
  • Ingredion (INGR), with its target price of $123.33, has surpassed estimates by 7%.
  • Lancaster Colony (LANC), with its target price of $113.7, has surpassed estimates by 11%.

The PowerShares DWA Consumer Staples Momentum ETF (PSL) and the iShares S&P MidCap 400 Value ETF (IJJ) invest a combined total of 3% in Ingredion.

Recommendations for Bunge

Goldman Sachs and Credit Suisse have given Bunge the highest target prices of $86 and $78, respectively. These target prices imply rises of ~48% and 34%, respectively, from the company’s closing price of $8.12 on July 6, 2016. They both call Bunge a “strong buy.”

Other companies that rate Bunge as a “strong buy” are BMO Capital Markets, Morningstar, Macquarie, Piper Jaffray, and Stephens. JPMorgan Chase downgraded the stock from “overweight” to “neutral” before its 1Q16 earnings release. Afterward, it increased its target price to $60—consistent with a “hold” rating.

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