We recently compiled a list of the 8 Best Fertilizer Stocks To Buy Now. In this article, we are going to take a look at where Bunge Global SA (NYSE:BG) stands against the other fertilizer stocks.
An Overview of the Fertilizer Industry
The fertilizer industry is a crucial sector in agriculture that focuses on the production and distribution of substances that enhance plant growth. By supplying necessary nutrients, fertilizers help improve crop yields and quality, which are essential for feeding the growing global population.
The industry has evolved significantly over time, with modern practices relying heavily on chemically manufactured fertilizers to support large-scale farming and meet the global demand for food. According to Mordor Intelligence, the global fertilizer market is estimated to have reached a value of $381.7 billion in 2024. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 5.99% during 2024-2030 to reach $541.2 billion by the end of the forecast period.
READ ALSO: 10 Undervalued Chemical Stocks to Invest In and 7 Best Agriculture Stocks to Buy Right Now.
There is a strong sense of optimism within the industry. The Fertilizer Institute’s 2023 Industry Trends Survey highlighted a positive outlook within the fertilizer sector, with many respondents expressing confidence in future growth. About 40% of those surveyed believe that market conditions have improved over the past five years, despite challenges like the COVID-19 pandemic and supply chain disruptions. Companies attribute their resilience to strategic practices such as precommitment purchases and careful planning. Nearly 80% of participants are optimistic about their businesses being equally or more profitable in the next five years.
The fertilizer industry is currently experiencing several key trends that are shaping its future. Advances in technology are transforming how fertilizers are produced and applied. Innovations such as precision agriculture, which uses data analytics and sensors, help farmers optimize fertilizer usage based on specific soil conditions and crop needs.
Additionally, there is a growing demand for fertilizers that offer more nutrients while reducing their environmental impact. The emphasis on maximizing the efficiency of fertilizer application to promote sustainable farming practices is increasing, which is driving the development of new and innovative solutions.
On August 13, CNBC reported that Windfall Bio, a California-based startup, is addressing methane emissions using “mems,” or methane-eating microbes. These microbes naturally consume methane and convert it into fertilizer. This innovative approach helps reduce harmful methane from sources like agriculture, landfills, and oil production. Farmers can use the fertilizer produced, while companies generating waste methane can sell it back to Windfall, creating a new revenue stream.
These trends indicate a dynamic shift in the fertilizer industry, balancing the need for increased food production with environmental sustainability and innovation.
Methodology
To compile our list of the 8 best fertilizer stocks to buy now, we used the Finviz and Yahoo stock screeners to find the largest fertilizer companies. We also reviewed our own rankings and consulted various online resources to compile a list of the best fertilizer stocks.
We carefully verified our list to remove any companies that can not be classified as fertilizer stocks. From an initial pool of over 15 fertilizer stocks, we focused on the stocks that analysts believe possess the greatest potential for growth. Finally, we ranked the 8 best fertilizer stocks to buy now based on their average price target upside potential according to analysts, as of November 18, 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial view of an orchard of different fruits, representing the abundance of the agribusiness.
Bunge Global SA (NYSE:BG)
Average Upside Potential According to Analysts: 19.37%
Bunge Global SA (NYSE:BG) is a leading agribusiness and food company that connects farmers to consumers by providing food, feed, and fuel. The company excels in oilseed processing while also being a major supplier of fertilizers in South America. Bunge Global SA (NYSE:BG) is also committed to supporting renewable energy solutions by leveraging its crop infrastructure.
On October 5, 2023, the company announced that its shareholders approved the merger with Viterra Limited, a significant player in the grains and oilseeds market. This acquisition will strengthen Bunge Global SA’s (NYSE:BG) capabilities and expand its global presence. The management expects that the transaction will close in late 2024 or early 2025.
In Q3 2024, Bunge Global SA (NYSE:BG) reported a diluted EPS of $1.56, down from $2.47 in Q3 2023. The overall results were impacted by a challenging global margin environment. However, management remains optimistic about future growth.
On October 1, 2024, the company completed the sale of its 50% stake in BP Bunge Bioenergia. This strategic move allows the company to focus on its core operations while divesting non-essential ventures. Additionally, Bunge Global SA (NYSE:BG) is developing a new palm and specialty oils facility in Avondale, Louisiana, which will enhance its service capabilities across North America.
Bunge’s (NYSE:BG) strategic initiatives and operational efficiencies position it well for future growth. BG ranks among the top 5 on our list of the best fertilizer stocks to buy now.
On October 31, TipRanks reported that Barclays analyst Benjamin Theurer reaffirmed a Buy rating on Bunge Global SA (NYSE:BG) with a price target of $115.00.
Overall, analysts have a positive outlook on Bunge Global SA (NYSE:BG). The 12-month median price target set by analysts indicates a potential increase of 19% from the stock’s current price.
Overall BG ranks 5th on our list of the best fertilizer stocks to buy. While we acknowledge the potential of BG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.
