Bunge Downgraded at Citi on Biofuel Weakness, Viterra (NYSE:BG) Doubts

Soybean seeds in the hands of a young, successful farmer, in the background a combine harvester working in a soybean field — branex/iStock via Getty Images

Bunge Global (NYSE:BG) was downgraded on Thursday from its previous investment rating of Buy by analysts at financial services company Citigroup to Neutral.

They said the agricultural supply and transportation company was facing weakness in key markets and that the planned takeover could did not improve results as much as expected.

“We see continued pressure on earnings at the industry level, particularly in North America, driven primarily by growing industry capacity (soybean meal and oil) and weaker demand growth from the U.S. biofuels industry than we expected,” Citigroup Global Markets analyst Thomas Palmer said in an Aug. 1 report.

Bunge (BG) said Wednesday it will delay its planned acquisition of Viterra (VTRAF), a Canadian grain handling company, pending antitrust approvals from China, Canada and the European Union.

Citigroup said the acquisition may not be as accretive to Bunge (BG) earnings as expected last year when the deal was announced.

“Viterra (VTRAF) may not be as accretive as we initially anticipated,” the report reads. “The delay in the Viterra (VTRAF) transaction also delays the benefits of capturing synergies.”

The bank lowered its target price for Bunge (BG) stock from $125 per share to $114 per share, based on an estimated enterprise value of 7.4 times 2025 earnings before interest, taxes, depreciation, and amortization.

Bunge (BG) shares fell on Wednesday after the company reported disappointing second-quarter results.