PIONEER FOOD GROUP
Investment banking group UBS has recently released an updated note on the JSE-listed food group and it maintains a “Sell” recommendation. This follows the announcement from Pioneer (PFG) that it will unbundle its agribusiness investments. Using a Sum Of The Parts (SOTP) methodology, analyst Renier Swanepoel has a 12-month price target of R72.10/share. Swanepoel wrote in a note to clients: “We believe the single biggest challenge within the PFG turnaround relates to the agribusiness. In effect, this responsibility will now be transferred to shareholders. Most of the divisions’ challenges are structural (such as over-capacity and inefficiency), while we are not convinced the company suffers from too many company-specific issues. Making the business model viable would be dependent on making the industry viable (lower feed prices and possibly some import tariff protection initiatives).