Deutsche Bank has reiterated its Buy rating on Genus (LSE:GNS), the London-listed porcine and bovine genetics group, with a 3300p price target implying substantial upside on the stock's last close of 2110p.
Analyst Damian McNeela said the group's pre-close update for the year to 30 June pointed to overall trading in the second half beating expectations, with PIC's porcine business outside China showing good underlying growth in adjusted operating profit as strong trading in Latin America and Europe offset weaker North American performance hit by disease challenges, mainly porcine reproductive and respiratory syndrome virus (PRRSv).
ABS, the bovine genetics division, delivered double-digit profit growth in line with expectations, with savings from the Value Acceleration Programme more than offsetting a negative product mix caused by lower dairy prices and fewer sexed semen sales.
The update follows a period in which Genus received roughly £111m in net cash consideration from Beijing Capital Agribusiness after forming its Chinese porcine joint venture, cutting year-end net leverage to about 0.4x ahead of preliminary results due on 10 September.
