Canaccord Genuity slashes target price on Anpario

Canaccord Genuity said 2022 had been "challenging" for Anpario due to a series of global events including the Russia-Ukraine war which affected energy and commodity prices. Additionally, the analysts highlighted that the delivery of products into China was "problematic" due to China's zero-Covid policy.

The Canadian bank highlighted that Anpario had taken active steps to manage costs and said that thanks to both its large inventory and the absence of debt on its balance sheet, it had benefited from a buffer that helped limit the shrinkage of gross margins.

Despite "a tough backdrop", Canaccord said there were positive sales performances, especially in the Americas, where a combination of positive currency exchange and the expansion of the aquaculture sector created "a particularly favourable environment" for Anpario.

"However, these positive results were offset by a substantial reduction in sale volumes in Europe (-22%). We still envisage a large expansion in LatAm and in North America in 2023 which was confirmed by yesterday's release; therefore, we see that with the stabilisation of the supply chain and commodity prices, Anpario should return to higher margins," concluded Canaccord, which also reiterated its 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com