Origin Enterprises shares rise as Investec upgrades to ‘buy’

Investec analyst Ian Hunter estimates company has scope for up to €100 million of deals

Origin Enterprises CEO Tom O’Mahony. Company shares gained as much as 3.4 per cent in early trading to €6.90 on Tuesday. Photograph: Eric Luke

Origin Enterprises CEO Tom O’Mahony. Company shares gained as much as 3.4 per cent in early trading to €6.90 on Tuesday. Photograph: Eric Luke

 

Shares in Origin Enterprises, the provider of animal feed, fertilisers and agri-services, were upgraded by investment firm Investec to outright “buy” on Tuesday amid a recovering market for its products and as the company increases acquisition spend.

Origin shares gained as much as 3.4 per cent in early trading to €6.90. However, they dipped by over 1 per cent in late trading, as European markets sold off towards the close.

Investec analyst Ian Hunter, who previously had a “hold” rating on the company, also raised his earnings forecasts and share price target on the stock by 30c to €7.30.

Brexit negotiations

“We believe that the underlying agricultural environment has been improving over the past six months and the agri-services sector, including Origin, is recovering,” said Mr Hunter.

“While the unknown impact of Brexit negotiations may augur some short-term caution, we believe that the risk to numbers going forward is to the upside.”

After four years of relative inactivity, Origin Enterprises spent €62.5 million last year on three businesses and has since committed a further €39.1 million on deals, according to Mr Hunter.

The analyst estimates that Origin has the balance sheet strength to spend up to €100 million in its financial year to the end of July 2018.