GRAINCORP LTD-A shares plummeted 5.43% during intraday trading on Tuesday, marking a significant decline for the agricultural company.
The sell-off followed an analyst report from Ord Minnett that downgraded GrainCorp to "accumulate" from "buy" and warned of a "potentially ugly scenario" for FY 2027 crop volumes. The analyst cited concerns about El Niño weather patterns reducing winter crop plantings and higher fertilizer, energy, and chemical input costs resulting from the Middle East conflict.
While near-term price movements support current throughput volumes, the risk profile appears asymmetric with Ord Minnett lowering its FY 2027 and FY 2028 EBITDA expectations by 25% and 23% respectively due to anticipated lower production volumes.