Vylor (VYLR) is a high quality compounder with a strong position in the global seeds market, UBS said in a report Monday as it starts coverage with a buy rating and a price target of $89.
The seed and genetics company spends about 10% of sales on
research and development, converting to annual seed yield growth with a low-single-digit growth pricing, the note said.
"There is a unique opportunity over the next 10 years to capture more licensing income on traits," the report said.
The note also said share gains in global corn, soy, and eventually wheat trait sales could add about 1% to annual pricing.
The note said EBITDA is forecast to grow at a 10% compound annual growth rate through 2029, while the market is pricing in only some 7% annual growth.
"Catalysts are beats vs. conservative expectations, upside
risks on higher crop prices, and potential gene editing approvals over the next year," the report said.
Price: 75.36, Change: +2.21, Percent Change: +3.02
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