Analysts Strongly Positive on Astarta
OREANDA-NEWS. On 14 July 2008 was announced, that high interest of investment funds to commodities, as well as rising demand for crops and bioethanol make agricultural business an attractive target for investments. "Big investment funds have already poured hundreds of billions of dollars into booming financial markets for commodities like wheat, corn and soybeans. But a few big private investors are starting to make bolder and longer-term bets that the world's need for food will greatly increase - by buying farmland, fertilizer, grain elevators and shipping equipment". (The NYT, June 5, 2008, "Food Is Gold, So Billions Invested in Farming").
This background, good projections for the 2008 harvest in Ukraine, and upward trend of international prices for agricultural commodities, make analysts covering ASTARTA Holding N.V. optimistic about the Company's future. In the reports released in May and June 2008, Company's prospects are regarded positive with recommendations BUY for its shares.
Troika Dialog, the oldest and largest private investment bank in Russia wrote that "ASTARTA Holding is cheap, trading at a 32% discount to its EM peers on 2009E P/E. Our new DCF-derived target price is \\$28.73 per share, which implies upside of 27% to the current mid price and leads us to upgrade our recommendation on the stock from HOLD to BUY. Intense investor interest in agricultural stocks and the CIS will lend the stock further support in 2008-09, especially as there is a dearth of available stock plays".
In the report of the Renaissance Capital, a part of the Renaissance Group, an independent group of finance and investment companies specializing in high-opportunity emerging markets, the emphasis is made on the efficient production activities of ASTARTA: "We value ASTARTA on a DCF-derived price of EUR17.5 per share, which implies 23% upside potential. ASTARTA trades at a 42% discount to its international peers on a 2008E EV/EBITDA multiple which we believe is unjustified for a company with such a large land bank, most of which is in operation, and which exercises a high degree of control over its production costs. We upgrade the stock to BUY from Hold".
Investment Company Concorde Capital rised the target price of ASTARTA from \\$16.9 to \\$23 with the BUY recommendation. "The target price is up in connection with the revised plans of the development of a company". Investment Group Sokrat recommends to BUY stocks of ASTARTA with target price \\$29.9: "Business of ASTARTA is no longer concentrated only on the production of sugar, and plugs into highly remunerative segments, like crops and cattle farming production. Excellent corporate governance, strong financial results and expanding operational margins are constantly enriching the value of the company's stock".
ING analysts set the 12 month target price of ASTARTA at PLN 53.3 indicating that "The company is exposed to favorable trends in global agriculture and is less sensitive to economic slowdown. Such stocks are sought by investors and deserve some premium".
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