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.
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