Bunge ( NYSE: BG ) shares slipped on Thursday as Baird stepped to the sidelines after a disappointing earnings result reported on Wednesday.
The St. Louis-based agricultural company reported sales below expectations on Wednesday while also offering somewhat soft guidance. The latter was a particular sticking point for Baird in its downgrade.
“While the guidance is likely conservative and a starting point for the year, we expect shares to languish in the near term until there is more clarity on 2023 and beyond,” equity analyst Ben Kallo told clients. “Although we like BG's management team and valuation, we prefer Darling Ingredients ( DAR ) and Archer-Daniels-Midland ( ADM ) for sector exposure.”
He added that Bunge’s decision not to repurchase any shares during the reported quarter raised a red flag. As such, Kallo took his rating to Neutral from a prior Outperform and lowered his price target to $115 from $128.
Shares of Bunge ( BG ) dipped 2.13% in afternoon trading on Thursday.
Read the company’s most recent earnings call transcript .
For further details see:
Bunge cut to Hold as Baird questions capital allocation strategy