On Friday, Deutsche Bank adjusted its outlook on Suedzucker AG (SZR:GR) (OTC: SUEZY), reducing the price target to EUR12.00 from EUR13.00, while keeping a Hold rating on the stock. This decision follows the release of the company's full second-quarter results, which aligned with preliminary figures unveiled on September 16.
Suedzucker reported sales of €2.54 billion, showing a modest year-over-year decline of 1%, and an operating result of €114 million, which represents a significant decrease of 63% compared to the previous year. The company also reaffirmed its revised forecast for the fiscal year 2024/25, anticipating sales to be between €9.5 billion and €9.9 billion and operating results ranging from €175 million to €275 million.
The primary factor behind the profit downturn in the second quarter was the performance of Suedzucker's sugar segment, which saw a dramatic 93% year-over-year drop in profit to €13 million. The segment suffered due to increased production costs and reduced sales prices during the quarter. The lower sales prices were attributed to a decline in EU sugar prices and a significant rise in exports from the EU to the global market, which was necessary to alleviate inventory stockpiles.
InvestingPro Insights
Despite the recent challenges faced by Suedzucker AG, as highlighted in Deutsche Bank's adjusted outlook, InvestingPro data reveals some interesting aspects of the company's financial position. Suedzucker's P/E ratio stands at a low 4.96, indicating that the stock may be undervalued relative to its earnings. This is further supported by an InvestingPro Tip suggesting that the company is "trading at a low earnings multiple."
Additionally, Suedzucker boasts a significant dividend yield of 5.12%, which aligns with another InvestingPro Tip stating that the company "pays a significant dividend to shareholders." This could be particularly attractive to income-focused investors, especially considering that Suedzucker "has maintained dividend payments for 33 consecutive years," according to another tip.
It's worth noting that while the company faces current headwinds in its sugar segment, as mentioned in the article, Suedzucker's revenue for the last twelve months as of Q1 2025 was $11,218.27 million, with a revenue growth of 6.06% over the same period. This suggests that despite short-term challenges, the company maintains a substantial revenue base.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Suedzucker AG, providing a deeper understanding of the company's financial health and market position.
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