Elders results will come out on 13th of November. I am expecting...

Elders results will come out on 13th of November. I am expecting they will struggle to meet their previous guidance.

Last we heard anything was in August when they lowered their EBIT guidance from ~$200m to ~$170m, substantially lower than FY22 $232m and possibly lower than FY21 $167m.

If you dig a bit, you will see why I am bearish on them achieving their revised targets. Agency services (livestock trading) is 20% of EBITDA - it accounted for $18m of the NPAT drop in 1H23 which went from $91 to $48m - so a fair whack of their 1H decline. In 1H23, the average price of cattle was 6.9% down from 2022 - since then the cattle price has gone down -60% from the peak and dropped about -40% in the 2H23 alone. Sheep is even worse. Real estate which accounts for 10% of their EBITDA has fallen substantially in terms of prices and turnover. Farmers have stopped spending where they can. So all in all, not a great time to be an Elders shareholder as I'd be pretty worried about their results.

But. I posted recently that I think the agriculture sector has bottomed pretty much last month. El Nino will scare people off, because the effects are yet to be felt and we know it's coming, but it won't be as bad as people think according to the boffins in the US-NOAA. So if Elders gets smashed from these results, and if you think agriculture will improve from here.. well Elders is already down from $14.30 to $6.20.. maybe pick it up at $5 or $5.50? Because there is long term value in Elders in my opinion, though I would need a greater margin of safety before I will jump on board.