What Investors Are Paying for Agribusiness Stocks: Part 2



The remaining companies

In this part, we’ll compare the five remaining agribusiness companies’ valuation, again using forward EV-to-EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiples.

Valuation multiples

As shown in the above chart, the remaining companies’ valuation multiples have risen in the last two years. At 18.3x, FMC (FMC) was trading at a premium to the peer median of 12.2x. As the company has traded between 12x and 18.4x this year, its current valuation multiple is close to its one-year peak. Intrepid Potash (IPI) was also trading above the peer median, at 12.4x. The stock has seen high volatility this year, trading between 9.5x and 31.5x.

On December 21, Monsanto (MON) was trading at 12.2x, equal to the peer median. The company is trading close to the lower end of its 2017 range of 12.1x–13.7x.

CVR Partners (UAN) and Israel Chemicals (ICL) are both trading below the peer median. CVR Partners, which is expected to report earnings per share of -$0.30 and has traded between 7.3x and 10.6x in 2017, was trading at 8.2x. Israel Chemicals, which had the narrowest EBITDA margin in the peer group and has traded between 7x and 8.5x in 2017, was trading at a valuation multiple of 7x. We’ll soon cover some of the above companies’ (MOO) earnings results—be sure to check back.

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