Chesterfield, Missouri-based Bunge Global SA (BG) operates as an agribusiness and food company that produces and supplies plant-based oils, fats, and protein. Valued at $9.9 billion by market cap, the company’s products are used in a wide range of applications, such as animal feed, cooking oils and flours, as well as bakery and confectionery, dairy fat alternatives, plant-based meat, and infant nutrition.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and BG fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the farm products industry. Bunge's global network spans 40+ countries, leveraging market opportunities while minimizing risks. Its integrated supply chain ensures efficiency, cost-effectiveness, and quality. Diversified products and strategic partnerships with farmers, stakeholders, and governments drive growth and strengthen its market position.
Despite its notable strength, BG slipped 33.4% from its 52-week high of $114.92, achieved on Jul. 26, 2024. Over the past three months, BG stock has declined 2%, underperforming the VanEck Agribusiness ETF’s (MOO) 6% gains during the same time frame.
In the longer term, shares of BG dipped 1.6% on a YTD basis and fell 25.3% over the past 52 weeks, underperforming MOO’s YTD gains of 6.7% and 8.2% losses over the last year.
To confirm the bearish trend, BG has been trading below its 200-day moving average since early August. However, despite the negative price momentum, the stock is trading above its 50-day moving average recently.
The diminished results of BG were primarily due to tough market conditions in South America, which led to decreased industry margins. Additionally, increased corporate expenses, including performance-based compensation and project-related costs, also contributed to the company's underperformance.
On Feb. 5, BG shares closed down more than 6% after reporting its Q4 results. Its adjusted EPS of $2.13 fell short of Wall Street expectations of $2.30. The company’s revenue stood at $13.5 billion, down 9.3% year over year.
BG’s rival, Archer-Daniels-Midland Company (ADM) shares lagged behind the stock, with a loss of 4.4% on a YTD basis but outpaced the stock with a 23.4% dip over the past 52 weeks.
Wall Street analysts are moderately bullish on BG’s prospects. The stock has a consensus “Moderate Buy” rating from the seven analysts covering it, and the mean price target of $86.50 suggests a potential upside of 13.1% from current price levels.
