The firm said it lowered its rating on the holding company, which operates businesses from farm fields to consumer foods, and a global agribusiness and food company, based on the decline in sugar and ethanol prices.
JPMorgan also cited increasing risks in Brazil following the elections as a reason for the downgrade, theflyonthewall.com reports.
JPMorgan maintained its $87 price target on the stock.
Separately, TheStreet Ratings team rates BUNGE LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BUNGE LTD (BG) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BG's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 8.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 111.8% when compared to the same quarter one year prior, rising from $136.00 million to $288.00 million.
- Net operating cash flow has significantly increased by 143.18% to $266.00 million when compared to the same quarter last year. In addition, BUNGE LTD has also vastly surpassed the industry average cash flow growth rate of 7.60%.
- BUNGE LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BUNGE LTD reported lower earnings of $0.89 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($5.95 versus $0.89).
- BG's debt-to-equity ratio of 0.86 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.71 is weak.
- You can view the full analysis from the report here: BG Ratings Report