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Bunge (BG) to Acquire 49% of BZ Group to Expand in Europe

Bunge Ltd. BG announced that it would buy a 49% stake in BZ Group. The partnership will strengthen BG’s presence in the largest cereal export terminal in Western Europe, the port of Rouen. Through the agreement, the company will broaden its portfolio.

 

The alliance will benefit from BZ's expertise in the France market and Bunge's global reach. With the partnership, BG expects to provide fresh opportunities and flexible solutions to its customers. Over the years, Bunge and BZ have developed a strong relationship. Turning the same into a partnership will intensify the companies’ operational and commercial cooperation.

 

Based in Normandy, France, BZ collects grains, oilseeds and pulses in northwest France and exports agricultural commodities through its Rouen export terminal.

 

Headquartered in St. Louis, Missouri, Bunge is a US-based global agribusiness and food company covering the farm-to-consumer food chain. It is involved in food processing, grain trading and fertilizing.

 

In the third quarter of 2022, the company reported earnings of $3.45 per share, beating the Zacks Consensus Estimate of $2.44 per share. Notably, BG reported earnings of $3.72 per share in third-quarter 2021. Revenues for the third quarter were $16.76 billion. The top line surpassed the Zacks Consensus Estimate of $15.5 billion. A year ago, Bunge posted revenues of $14.12 billion.

 

In the recently reported quarter, the company witnessed strong results from Agribusiness, and Refined and Specialty Oils, reflecting strength in most regions. The strong results demonstrate the flexibility of BG’s global platform amid market volatility.

 

Based on its third-quarter results and the current environment, the company increased its 2022 EPS outlook to at least $13.50. BG expects the full-year results of Agribusiness, and Refined and Specialty Oils to be higher than that stated previously. It expects Milling, and Corporate and Other segments to be in line with its previous guidance.

 

The Zacks Consensus Estimate for the current year's earnings is pegged at $13.89, suggesting growth of 7.4% from the previous year’s reported number. The consensus estimate for revenues is pegged at $69.4 billion, suggesting 17.3% year-over-year growth.

 

BG has a four-quarter trailing average surprise of 18.7%.

Price Performance

Shares of Bunge have gained 15% over the past year compared with the industry's growth of 1.5%.

 

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Zacks Investment Research


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Zacks Rank and Other Stocks to Consider

Bunge currently sports a Zacks Rank #1 (Strong Buy).

 

Some other top-ranked stocks in the basic materials space are CalMaine Foods CALM, Sociedad Quimica y Minera de Chile S.A. SQM and Innospec IOSP. While CALM and SQM flaunt a Zacks Rank #1 at present, IOSP carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

CalMaine Foods has an expected earnings growth rate of 197.8% for the current year. Its earnings estimates for 2022 are pegged at $8.10 per share. CALM’s earnings estimates have been unchanged in the past 30 days. The stock has gained 62.1% in the past year.

 

The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is $13.13, suggesting 520% growth from the year-ago reported figure. Earnings estimates have moved 7.3% north in the past 30 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have surged 61.2% in the past year.

 

Innospec has projected a year-over-year earnings growth rate of 30.4% for the current year. Zacks Consensus Estimate for the company’s current year earnings is $6.26. IOSP has a trailing four-quarter earnings surprise of 25.6%, on average. Shares of IOSP have jumped 32.7% in a year.

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