Wednesday's analyst upgrades and downgrades
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
AGT Food and Ingredients Inc. (AGT-T) is well positioned to capitalize on promising outlook in the pulse market, which helped contribute to a big earnings beat.
On Monday, AGT's fourth-quarter earnings beat analyst expectations, with adjusted earnings before interest, taxes, depreciation and amortization coming in at $32.9-million compared to a consensus forecast of $28.6-million.
The earnings surprise was primarily due to a surge in the company's legacy pulse business, as well as evidence that recent acquisitions are proving more beneficial than expected, said Raymond James analyst Steve Hansen.
Last year, AGT announced two logistical acquisitions, which have "not only fortified the company's origination capabilities, but also facilitated an improved optimization of its core pulse processing assets," Mr. Hansen said.
Meanwhile, the international pulse market remains favourable for AGT, with "lackluster production in India and Turkey stoking import demand while the Canadian supply base remains healthy," Mr. Hansen said. "With that said, we do highlight that the voracious pace of exports could result in similar supply challenges as those seen last year but continue to believe that AGT is now better positioned to navigate such challenges given recent enhancements to its origination network.”
And AGT is also showing continued momentum in its ingredients platform, which is operating at 90 per cent utilization, with more capacity expansion expected.
The analyst upgraded the stock to "outperform" from "market perform" and raised his price target to $43 (Canadian) from $35.