Nufarm

Wednesday 7th September 2011

Nufarm (ASX: NUF) has been upgraded to Hold from Sell, by Citi, with a price target of A$4.20. Citi says "Whilst we remain cautious on the structural challenges and near-term earnings headwinds facing the company, we believe the current share price fall adequately reflects these risks."

Citi analyst Tim Mitchell says refinancing of A$600 million in syndicated term debt expiring in December remains outstanding while an equity raising can't be ruled out given NUF has more than A$850 million in total net debt. He also notes a stronger AUD provides a favorable environment to import agricultural chemicals, which helps to drive Citi's downgrade in earnings forecasts.

Nufarm is one of the world's leading crop protection companies which produces products to help farmers protect their crops against damage caused by weeds, pests and disease.

Nufarm grew quickly in previous years through both acquisition and solid organic growth which saw the business rapidly expand and debt levels increase. Post GFC, NUF raised capital via a dilutive equity raising which only partially addressed its debt problems.

Contact IRG on 0800 437 8489

**A disclosure statement is available, on request and free of charge by calling 0800 437 8489.

Recommendation sourced from the IRESS software trading platform

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Nufarm

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