DJ ArborGen Holdings (ARB): Green shoots appear in the spring
Edison Investment Research Limited ArborGen Holdings (ARB): Green shoots appear in the spring 26-Jul-2023 / 21:00 GMT/BST The issuer is solely responsible for the content of this announcement.=----------------------------------------------------------------------------------------------------------------------
London, UK, 27 July 2023
ArborGen Holdings (ARB): Green shoots appear in the spring We believe ArborGen Holdings is in prime position, not only to address increasing demands from clients for its seedlings, but also for its ongoing investment in genetic improvement to continue to drive the switch to sales of higher-value, higher-margin seedlings to all its key markets. While this process plays out, underlying EBIT is set to increase five-fold in the next two years as gross margins return to and then exceed historical levels. We determine a value of NZUSD0.49/share, implying attractive upside.
We believe there are a number of drivers of revenue growth that will push the top line in a positive direction, which will be augmented by margin expansion, thus allowing underlying EBIT to increase five-fold over the next two years. Furthermore, the business should see cash generation improve as profits rise and the build-up in working capital eases. This should result in reduced net debt such that balance sheet capacity expands, offering increased optionality in future years. These characteristics are reflected on our DCF, which implies a value for ArborGen of NZUSD0.49/share, materially above the current share price. Click here to view the full report.
All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison has more than 100 analysts and covers every economic sector. Headquartered in London, Edison also has offices in New York, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Andy Murphy +44 (0)20 3077 5700 industrials@edisongroup.com Learn more at www.edisongroup.com and connect with Edison on: LinkedIn www.linkedin.com/company/edison-group-/ Twitter www.twitter.com/Edison_Inv_Res YouTube www.youtube.com/edisonitv
=----------------------------------------------------------------------------------------------------------------------
Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
=----------------------------------------------------------------------------------------------------------------------
1689155 26-Jul-2023
Image link: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1689155&application_name=news
(END) Dow Jones Newswires
July 26, 2023 16:00 ET (20:00 GMT)
