IBI Investment House analyst Yuval Zehira gives agrochemicals maker Makhteshim Agan Industries Ltd. (TASE: MAIN) a "Neutral" recommendation with a target price of NIS 31, an 11.5% premium on its market price, ahead of the publication of the company's second quarter financial report in early August.
Zehira says that Makhteshim Agan "is continuing to ride the wave", and that it will report 20% revenue growth for the second quarter thanks to strong demand by farmers. He believes that rising prices for pesticides will offset the sharp rise in prices of raw materials, which will keep the company's profits stable.
Zehira predicts that Makhteshim Agan will post a net profit of more than $70 million, much better than for the corresponding quarter of last year, but considerably less than for the preceding quarter. This figure will be a record second quarter profit.
Zehira notes the company's strong points: strong demand in Europe contributes to the company's revenue and profits, in part thanks to the euro's strength against the dollar; ongoing growth in agriculture in emerging markets, which is boosting demand for agrochemicals made by the company; and rising prices for GlyFosat, a herbicide that accounts for 10% of the company's sales.
Makhteshim Agan is a unit of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman and CEO Nochi Dankner, held through Discount Investment Corporation (TASE: DISI) subsidiary Koor Industries Ltd. (TASE:KOR).
Published by Globes [online], Israel business news - www.globes-online.com - on July 24, 2008
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