Shares of Bega Cheese (ASX:BGA) have surged up to 5.4% reaching A$2.95, its highest point since September 4th.
Bell Porter, a brokerage firm, has upgraded the dairy company’s status from ‘Hold’ to ‘Buy’.
Nevertheless, it revised the target price downwards to A$3.35 per share from A$3.50 per share previously.
The brokerage has stated that commodity prices have consolidated while the overall production volumes of Australian milk have steadfastly stayed consistent on a Y-O-Y basis.
The consistent retail milk price growth surpassing farmgate milk prices, along with industry efforts to cut down on processing capacity, could help the company reach its five-year objectives.
For FY25 and FY26, the brokerage has increased its operating profit estimations by 5% and 8% respectively, and has also raised its NPAT estimate for FY25 and FY26 by 18% and 26% respectively.
Out of nine analysts, one rates the stock as ‘buy’ or higher, five recommend ‘hold’ and three suggest ‘sell’ or lower with a median PT of A$3.48, according to LSEG data.
Despite a ~27.8% fall this year as of the last close, the stock sees a positive momentum.
Bega Cheese offers an array of dairy and food products, headquartered in Bega, New South Wales, Australia.