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The Andersons, Inc. (ANDE - Free Report) is navigating a changing agriculture market in 2023. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline nearly 35% this year.
The Andersons is an agribusiness company which has grown, over the last 76 years, from a single grain elevator to a diverse company with commodity merchandising (trade), renewables, and nutrient and industrial specialties.
It has 79 facilities in the trade division, 4 in renewables and 37 in nutrient and industrial.
Q1 Record for Trade
On May 2, 2023, The Andersons reported its first quarter 2023 results and beat the Zacks Consensus by $0.03. Earnings were $0.20 versus the consensus of $0.17. It was the fourth earnings beat in a row. It's last earnings miss came at the start of the Ukraine War when it got caught on the wrong side of the trade as prices spiked.
Trade led the first quarter this year, with an adjusted pretax income of $24 million, a record first quarter. Renewables saw a pretax loss of $83 million while Nutrient & Industrial also reported a pretax loss of $10 million on a slow start to the planting season.
Fertilizer prices fell in the quarter and customers deferred purchasing. The Andersons said some of the typical first quarter business would shift into Q2, but The Andersons didn't believe all of it would be recovered.
The company continues to generate strong free cash flows. The Andersons is shareholder friendly and currently pays a dividend yielding 1.6%.
Analysts are Bearish
The 2023 Zacks Consensus has been on the decline over the last 60 days as one analyst had cut estimates during that time. The Zacks Consensus has fallen to $2.65 from $2.94 over the last 2 months.
That is an earnings decline of 34.6% over 2022 which saw The Andersons make $4.05.
However, keep in mind that The Andersons is a small cap company with a market cap of just $1.6 billion. Small cap companies are lightly covered on Wall Street compared to the large caps. Zacks only has 2 full year estimates for 2023.
Shares Up in 2023
Despite the earnings decline, shares are up 33.4% year-to-date and are trading near 52-week highs.
Image Source: Zacks Investment Research
It's not cheap on a P/E basis as it has a forward P/E of 17.6 but it has dirt-cheap P/B and P/S ratios of 1.2 and 0.09, respectively.
Still, the rebound off the 2022 sell-off appears to be priced in now but the shares have yet to take out the 2022 highs.
The Andersons will report second quarter results on Aug 1, 2023. Investors interested in an agribusiness company should tune into the earnings results. They could be a catalyst for some positive earnings estimate revisions, and a change in the Zacks Rank.
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Bear of the Day: The Andersons (ANDE)
The Andersons, Inc. (ANDE - Free Report) is navigating a changing agriculture market in 2023. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline nearly 35% this year.
The Andersons is an agribusiness company which has grown, over the last 76 years, from a single grain elevator to a diverse company with commodity merchandising (trade), renewables, and nutrient and industrial specialties.
It has 79 facilities in the trade division, 4 in renewables and 37 in nutrient and industrial.
Q1 Record for Trade
On May 2, 2023, The Andersons reported its first quarter 2023 results and beat the Zacks Consensus by $0.03. Earnings were $0.20 versus the consensus of $0.17. It was the fourth earnings beat in a row. It's last earnings miss came at the start of the Ukraine War when it got caught on the wrong side of the trade as prices spiked.
Trade led the first quarter this year, with an adjusted pretax income of $24 million, a record first quarter. Renewables saw a pretax loss of $83 million while Nutrient & Industrial also reported a pretax loss of $10 million on a slow start to the planting season.
Fertilizer prices fell in the quarter and customers deferred purchasing. The Andersons said some of the typical first quarter business would shift into Q2, but The Andersons didn't believe all of it would be recovered.
The company continues to generate strong free cash flows. The Andersons is shareholder friendly and currently pays a dividend yielding 1.6%.
Analysts are Bearish
The 2023 Zacks Consensus has been on the decline over the last 60 days as one analyst had cut estimates during that time. The Zacks Consensus has fallen to $2.65 from $2.94 over the last 2 months.
That is an earnings decline of 34.6% over 2022 which saw The Andersons make $4.05.
However, keep in mind that The Andersons is a small cap company with a market cap of just $1.6 billion. Small cap companies are lightly covered on Wall Street compared to the large caps. Zacks only has 2 full year estimates for 2023.
Shares Up in 2023
Despite the earnings decline, shares are up 33.4% year-to-date and are trading near 52-week highs.
Image Source: Zacks Investment Research
It's not cheap on a P/E basis as it has a forward P/E of 17.6 but it has dirt-cheap P/B and P/S ratios of 1.2 and 0.09, respectively.
Still, the rebound off the 2022 sell-off appears to be priced in now but the shares have yet to take out the 2022 highs.
The Andersons will report second quarter results on Aug 1, 2023. Investors interested in an agribusiness company should tune into the earnings results. They could be a catalyst for some positive earnings estimate revisions, and a change in the Zacks Rank.