Bunge (NYSE:BG) bounces between gains and losses Thursday as Bank of America upgrades shares to Buy from Neutral with a $135 price target, saying the stock’s 29% slump from its April high is “largely unwarranted” due to favorable long-term fundamentals for the soybean crush and ag trading businesses.
Bunge (BG) offers a better risk/reward than Archer Daniels Midland (ADM) on “more attractive valuation… and a bigger focus on soft commodities trading/merchandizing and soybean crushing,” according to BofA’s Steve Byrne, who maintains his Neutral rating on ADM.
Byrne believes both Bunge (BG) and ADM (ADM) as unlikely to be affected by a recession and should have structural tailwinds for the next few years.
The analyst sees “little risk” to the ag cycle, especially as more data points to a sharp reduction in fertilizer applications globally, biofuel standards have not been rolled back as expected, and U.S. weather during planting season was unfavorable – all supporting elevated crop prices.
Bunge (BG) shares fell last week after one of its Ukrainian grain facilities was hit by Russian missiles.