On Thursday, Berenberg analyst Sebastian Bray adjusted the price target for Corbion NV (CRBN:NA) (OTC: CSNVF), a global bio-based products company, to €24.00, a decrease from the previous target of €26.00. Despite this change, the firm maintained a Hold rating on the stock.
"We have grown more comfortable with 2025 Bloomberg consensus EBITDA for Corbion (EUR217m) than at the time of our October downgrade: The value meal is over: down to Hold dated 29 October 2024," the firm said in a note.
The adjustment in the price target is attributed to short-term market factors. Notably, the cost of sugar, a significant raw material for Corbion, has continued to decline since October. Conversely, the price of fish oil, specifically with 28% Omega 3 content, has risen slightly to USD 4.5 per kilogram and above. This increase is partly due to lower year-to-date production in Chile and Iceland, which has counteracted higher output from Peru.
The elevated fish oil prices are potentially favorable for Corbion's Omega-3 rich algal oils. However, the analyst indicated that the pricing for a large portion of Corbion's portfolio may already be determined by multi-year contracts, suggesting limited immediate financial flexibility from these market changes.
Looking ahead, Corbion plans to expand its product range beyond animal nutrition and pet food. In 2025, the company aims to enter the market for high-priced Omega-3 oils intended for human nutrition. Although this new venture is anticipated, Berenberg anticipates that the initial financial impact on Corbion's performance will be minimal, leading to the conservative adjustment of the price target.
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