Desjardins Desjardins Securities analyst Gary Ho has issued a bullish outlook on Ag Growth International Inc. (AFN-T), suggesting that the stock could rise considerably above his current target price under a best-case scenario thanks to growth in the firm’s international segment.
The analyst said Ag Growth’s International segment accounts for about 33 per cent of its revenue today but has the potential to contribute up to 45 per cent in the near to medium term.
“AFN is in geographies that are critical food pillars globally, yet are under-invested in ag infrastructure. Product transfers should reap tangible benefits in 2024. Despite near-term softness in Brazil and Australia Farm due to dry conditions, we remain very bullish,” he said.
While his price target remains for now at C$82, he sees a “blue-sky”, or best-case, scenario where the stock exceeds that target by between C$18 and C$36.
“South America, APAC and EMEA account for about one-third of last twelve months of revenue, and we believe they could outpace North America to represent about 40–45% of the mix over the coming years, driven by local ag infrastructure buildout, product transfers and organic investments—first in India, followed by Brazil, starting as early as 2H24,” Mr. Ho said in a note.
He has a “buy” rating on the stock