Stock of the day: Nufarm

(AI video summary)

This video was created on 21 May 2025 for IG audiences by ausbiz.

ASX code: NUF

Nufarm's profit slump and market reaction

Agricultural chemical company Nufarm has announced a nearly 40% decline in statutory net profits for the first half (H1) of the 2025 financial year (FY25) and will not pay an interim dividend. Nufarm attributes this to weakness in fish oil pricing, which may continue to impact full-year revenue.

The market responded severely, with Nufarm's share price plummeting 28% following the announcement.

Technical analysis shows downward pressure

Nufarm had been trading between $3.50 and $4.30 for months before this announcement. Today's decline broke through significant support levels, confirming a bearish outlook.

Looking at longer-term charts, Nufarm has been in a downtrend since early 2017. The stock is now trading outside its bollinger bands, suggesting extreme oversold conditions that might prompt a short-term bounce.

Investment outlook

Analysts note that Nufarm's promised growth drivers are not delivering as expected, continuing a pattern of underperformance.

For current investors, a technical bounce may occur in the next session due to oversold conditions. However, analysts view potential rebounds as selling opportunities rather than signs of recovery.

Given the broken support levels and deteriorating fundamentals, Nufarm's outlook remains challenging.