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 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 .
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Bunge upgraded at BofA on valuation, with little downside risk to the ag cycle