Most of the analyst reports have target prices over $3. This was before the cost of debt went down by over 2%. So my expectation is that as the key risks are steadily addressed (pre-sales to China/India, no refinancing now till 2023, external financing for grower loans, ability to smooth harvests by buying MIS forests, greater diversity of revenue, single digit Price / Free-Cash-Flow per Share from FY17), the share price should steadily move up into the $2 to $2.50 range, closer to the analyst targets, which should also increase further thanks to the lower risk-free rate and lower cost of debt.
As one who has been taking advantage of the extreme volatility in share price thanks to our short-selling friends, I expect this volatility to decrease, but am hoping it still happens to some extent. Lower volatility will also increase analyst calculations of net present value due to a lower beta.
Due to the reduced risk as outlined above, I do not expect the share price to have any more major dips below $1.40. All my opinion of course.
TFC Price at posting:
$1.57 Sentiment: Buy Disclosure: Held
