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Nufarm share price: what to expect from full-year results

With the company recently revising its full-year earnings (EBITDA), below we take a look at some of the key things investors should be aware of before Nufarm reports its FY19 results.

Earnings preview: Nufarm FY19 results in focus Source: Bloomberg

When will Nufarm release its FY19 results?

Nufarm (ASX: NUF) is set to release its 2019 full-year results to the market on Monday, September 30 – before the market opens.

What is the company’s full-year guidance?

The company faced a challenging first-half in FY19, reporting profits (NPAT) that came in significantly lower than the prior corresponding period. The company also suspended its first-half dividend.

Amongst all this, there remains glimpses of growth, with Nufarm seeing good outcomes across its North America and Latin America business segments, as well as its seed technologies.

Primarily, while the company initially guided full-year 2019 earnings (EBITDA) in the range of A$440m to A$470m, Nufarm has since revised this figure downwards to around A$420m.

On this revised figure, CEO and Managing Director Greg Hunt said:

‘It's been a difficult year, with external headwinds impacting performance in three of our four major markets.’

Mr Hunt added that:

‘We are disappointed the work we have done to mitigate the external challenges has not been enough to achieve the targets we set for the financial year.’

Though the downgrade may be a disappointing development for investors, Nufarm (ASX: NUF) has taken proactive steps to sure up its balance sheet in the meantime.

For example, in August, the company raised A$97.5m through the placement of preference securities to current shareholders and the Sumitomo Chemical Company.

Nufarm share price: the analyst take

Though the Nufarm (ASX: NUF) share price has fallen approximately 22% since January, analysts continue to view the stock optimistically.

According to the Wall Street Journal, of the analysts covering the stock: five rate it a buy, while two rate it overweight. Only four analysts rate it a hold.

Overall, the average analyst consensus on Nufarm is overweight.

Morgan Stanley in particular seems positive on Nufarm's prospects, with the investment bank hitting the company with an overweight rating and a price target of A$7.10 per share.

On today’s share price of A$4.50, such a price target would imply potential upside of around 57%.

Ultimately, Morgan Stanley believes that Nufarm's latest share placement ranks as a key positive. However, the bank looks to be closely watching if Nufarm can effectively execute on its European acquisition agenda, citing poor performance on this front as a key risk.

As always, unfavourable weather conditions also pose a risk to the company's prospects, says Morgan Stanley.

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