Share ForFarmers rides on Trump rally

Wednesday was a historic one for the US stock exchange when the Dow Jones index rose above the 20.000 mark for the first time. The New York stock exchange – and other Western stock exchanges – are brightening up mainly due to the so-called Trump rally. Analysts also see a lot of potential in the share of feed producer ForFarmers.

After Donald Trump's election victory, the Dow Jones made a remarkable leap forward, crossing the 19.000 point mark for the first time last November. The rally was mainly fueled by bank stocks. These have recently been popular because investors are counting on less strict rules for banks under Trump, with interest rates rising further. As an example; During the financial crisis in 2009, the Dow Jones hit a low of 6496,95 points.

European stock markets are also benefiting from the positive sentiment in America. At the beginning of November, the AEX index was still below 450 points, but since the Trump rally, the Amsterdam stock exchange on the Damrak has risen to well above 480 points. On Wednesday, the AEX closed one percent higher at 488,03 points. The Midkap also rose 0,8 percent to 694,27 points on Wednesday.

At the Midkap, the ForFarmers share attracted attention on Wednesday. Analysts at KBC Securities see a lot of music in the share of the animal feed manufacturer from Lochem. Up to and including 2020, ForFarmers is expected to increase its earnings per share by 30 percent to EUR 0,66, which led to a positive buy recommendation. KBC uses a price target of EUR 8,30 for the ForFarmers share. Other agencies also have a positive buy recommendation. 

Analysts expect ForFarmers to benefit from Brexit. It also suggests possible acquisitions, given that ForFarmers reportedly has EUR 200 million in cash to gain additional market share. As a result of the positive reporting, the share closed more than 3 percent higher on Wednesday at 6,88 euros. Thursday morning (11.58) the share again traded almost one percent higher at 6,88 euros. 

Chart: the Financial Telegraph 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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