Bunge: Merger With Viterra, Ethanol, And Low Stock Price Will Pave The Way

Daniel Mellado
187 Followers
(21min)

Summary

  • U.S. President Donald Trump's administration proposed higher quotas of biofuel for 2026 and 2027 in the U.S., a positive aspect for Bunge, as corn demand is expected to increase.
  • The stock price of Bunge is slightly higher than its 2018 trading price. However, its net income was $287 million in 2018, growing to $1,188 million in 2024.
  • The merger between Bunge and Viterra would considerably increase Bunge's revenues.
  • If Bunge can increase the net income margin of Viterra after the merger, it will experience a significant increase in its net income.

Closeup of Heap of Dried Soybeans Poured from Burlap Bag

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Investment Thesis

I grant Bunge Global SA (NYSE:BG) a Buy rating. I am of the opinion that the company experiences a significant undervaluation. In 2018, the company reported net income of $287 million, increasing to $1,188 million in 2024. However, the current

This article was written by

187 Followers
Daniel Mellado is an economist from Carabobo University with a Master's Degree in Statistics from Simon Bolivar University, both obtained in Venezuela.Daniel worked analyzing the agricultural commodity market and the financial investment portfolio for an agribusiness group. Then, he managed two teams, one in trading and the other in data analysis. The trading team invested in bonds, equities, and ETFs.His following job opportunities have been as a freelance developing and implementing strategies for algorithmic trading.He will bring to seekingalpha.com analysis and valuation for companies in the following sectors: commodities, banking, technological and pharmaceutical.The approach to generating buying and selling recommendations is based on financial statements, regulations, macroeconomic variables, etc.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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