Morningstar continues to hold an optimistic view on Nufarm, despite the potential challenges posed by current El Nino weather conditions.

The brokerage retains a fair-value estimate of A$7.70 for this agricultural chemicals company.

The firm’s analysts are maintaining their forecast for underlying fiscal 2023 earnings before interest, tax, depreciation, and amortization (EBITDA) at A$482 million, a 7% rise from fiscal 2022’s A$451 million.

Factors such as the normalization to high agricultural commodity prices and El Nino are identified as potential drivers.

However, trait revenue growth, particularly from omega-3 canola, could prove to be a significant spark for share price appreciation, according to Morningstar.

The brokerage holds the belief that the growing need for food in industrializing nations will underpin Nufarm’s long-term earnings growth.

Moreover, they anticipate that in partnership with Sumitomo Chemical, Nufarm will realize significant growth in its offshore markets.

As of the last closing, the stock has observed a decrease of 22.5% year-to-date.

Nufarm is an agricultural chemical company that delivers solutions to help farmers improve crop yield and quality.