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Ag Growth International Inc T.AFN

Alternate Symbol(s):  AGGZF | T.AFN.DB.H | T.AFN.DB.G | T.AFN.DB.I | T.AFN.DB.J

Ag Growth International Inc. is a provider of the equipment and solutions required to support the storage, transport, and processing of food globally. The Company provides equipment solutions for agriculture bulk commodities, including seed, fertilizer, grain, rice, feed, and food processing systems. It has manufacturing facilities in Canada, the United States, Brazil, Italy, France, and India and distributes its products globally. Its segments include Farm and commercial. Its Farm segment focuses on the needs of on-farm customers, and its product offerings include grain, seed, and fertilizer handling equipment; aeration products; grain and fuel storage solutions, and grain management technologies. Its Commercial segment focuses on commercial entities, such as port facility operators, food processors and elevators. Its product offerings include larger diameter grain storage bins and high-capacity grain handling equipment; food and feed handling storage and processing equipment.


TSX:AFN - Post by User

Post by SuperMon Jan 27, 2022 10:00am
229 Views
Post# 34366245

More from RBC

More from RBCUpside scenario Our upside scenario of $60 is based on strong agriculturalfundamentals carrying through 2023, and stronger penetration into International markets. In this scenario, we assume: (1) North American sales up 7.5% in 2023 as the strong ag environment persists; (2) higher-than-expected market share growth in International markets; (3) a +1% improvement in gross margins; and (4) a 2.5% terminal growth rate for our DCF valuation. We value the company based on a 50/50 weighting of our EV/EBITDA valuation and DCF calculation. We apply an 8.0x EV/EBITDA multiple to our upside scenario, as in this scenario we expect the overhang from the grain incident to fade. Downside scenario Our downside scenario of $20 is based on the agricultural cycle fading more quickly than we expect, and flat growth in AGI’sinternationalsales. In thisscenario, we assume: (1)North American sales increase only 5% in 2022 and no growth in 2023; (2) limited growth in International sales in 2022; (3) a 1% decline vs. gross margin estimates; and (4) a 1% terminal growth rate for our DCF valuation. We value the company based on a 50/50 weighting of our EV/EBITDA valuation and DCF calculation. We apply a 6.0x EV/EBITDA multiple to our downside scenario, below the historical average.

SM
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