SYDNEY — Elders Ltd. shares fell in early Monday trading after it was slapped with a ratings downgrade by a key investment bank.
The agricultural-services company’s shares slid 6.4% to 9.74 Australian dollars (US$6.62) after hitting a low of A$9.73. It is currently the worst performer on the S&P/ASX 200.
Analysts at UBS on Monday issued a research note outlining reasons for downgrading Elders to neutral from buy and cutting its target price by 25% to A$11.30 a share.
UBS analyst Evan Karatzas said the potential for Elders’s share price to outperform could be challenged in the near term. He attributed this view to the company having a more subdued earnings growth outlook, combined with management uncertainty due to the announced retirement of Chief Executive Mark Allison.
“To return to a positive stance, we look for a greater level of earnings growth visibility as well as future management clarity,” said Mr. Karatzas.
Elders shares are down 21% so far this calendar year.