Image source: Shutterstock

Highlights:

  • Citi lowers Elders target price from $9.75 to $8.60 following weaker first-half earnings.

  • Shares drop 6.7% to $6.16 after results impacted by dry weather in South Australia and Victoria.

  • Analysts remain optimistic on second-half catalysts including livestock, real estate, and potential weather improvements.

Citi has reduced its target price for agriculture and real estate group Elders (ASX:ELD) to $8.60, down from $9.75, following a challenging first half of the year marked by dry conditions in South Australia and Victoria. Despite the cut, Citi maintained its 'buy' rating on the stock.

Elders shares reacted to the news with a 6.7% decline to $6.16 on Monday.

Citi analysts highlighted that lower demand for crop protection products in South Australia and Victoria—key regions for Elders—was exacerbated by increased competition, which pushed prices downward. These factors combined to weigh on the group’s first-half earnings performance.

However, Citi remains optimistic about Elders’ prospects in the second half of the year. The analysts pointed to multiple potential growth drivers, including backward integration initiatives, bolt-on acquisitions, wool handling improvements, and sustained momentum in livestock and real estate services.

“There is no shortage of sequential upside catalysts to consider in 2H,” the Citi team noted, adding that weather improvements could further boost demand for post-emergent crop protection products in South Australia and Victoria.