Fund Manager Summary
The fund managers believe there is a significant opportunity in Elders Ltd, despite a recent share price drop to approximately $8.36 due to a downgrade in FY24 earnings expectations linked to lower sales. They initiated their position in Elders last October when they recognized that the Bureau of Meteorology's incorrect El Nino prediction led to shares trading at a material discount to intrinsic value. The subsequent correction in BOM's forecast has catalyzed a re-rating of Elders shares back towards their typical mid-cycle valuation. In their opinion, the recent downgrade does not reflect typical demand, and they expect the share price to recover above $10. Furthermore, they highlight Elders as a quality business, often referred to as the 'Bunnings of the Bush', due to its dominant position in rural Australia, vertical integration strategies, and top-tier management.
Source: Trading View
Commentary From The Managers
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Pendal Group
31 July 2025
$7.25
Summary
- Pendal Group observes that Elders Ltd is benefiting from improving Australian farming conditions.
- Favourable cropping conditions are noted, with recent rains aiding late plantings and expected yields.
- This improvement is anticipated to support sales for fertilisers and other agricultural supplies.
- Cattle prices have seen an increase and are projected to rise further.
- The low levels of the US cattle herd are contributing to this positive price outlook.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
31 July 2025
$7.25
- Pendal Group observes that Elders Ltd is benefiting from improving Australian farming conditions.
- Favourable cropping conditions are noted, with recent rains aiding late plantings and expected yields.
- This improvement is anticipated to support sales for fertilisers and other agricultural supplies.
- Cattle prices have seen an increase and are projected to rise further.
- The low levels of the US cattle herd are contributing to this positive price outlook.
Summary
Wilson Asset Management
31 July 2025
$7.25
- Elders provides agribusiness services across Australia, including livestock and wool agency, feedlots, rural real estate, and farm inputs.
- Beneficial rainfall and milder autumn weather in key agricultural regions have supported pasture recovery, livestock weight gains, and crop emergence.
- This seasonal improvement has boosted livestock prices and client sentiment.
- Wilson Asset Management believes the company is emerging from a cyclical low point.
- The upcoming ACCC announcement on the Delta Agriculture acquisition is viewed as a key potential catalyst for a re-rating of the share price.
- There is material upside to come via synergies over time, with the stock remaining inexpensive.
Summary
Milford Asset Management
31 July 2025
$7.25
- Milford Asset Management has recently added Elders Ltd to the Fund.
- Elders experienced a rally of 15.1% due to improved cattle pricing and favorable weather conditions in South Australia and Victoria.
- Despite this, Elders faces challenges including cyclically low earnings, uncertainty regarding a potential acquisition, and the complexities of a major systems upgrade.
- Milford believes that the market is over-penalising these concerns.
- Milford Asset Management continues to hold Elders due to its potential upside in the market.
Summary
Centennial Asset Management
18 July 2025
$6.63
- Centennial Asset Management notes that Elders has faced significant challenges recently, including a poor performance over the years.
- To maintain growth, Elders has had to acquire businesses, leading to declining returns.
- Adverse climate conditions have further impacted the company, with northern Australia experiencing excessive wetness and southern Australia being too dry.
- However, there are signs of improvement as northern Australia is starting to dry out, and southern regions have received some beneficial rainfall.
- This rain is significant for Elders, who operates in sectors such as livestock, financing, grains, and fertilizers.
- Additionally, real estate prices may benefit from increased rainfall and lower interest rates, potentially enhancing valuations for rural properties.
- Overall, Centennial Asset Management continues to hold their position in Elders due to these evolving conditions.
Summary
Ausbil Investment Management
31 July 2024
$9.37
- Elders (ELD) returned +16.7% for the month
- Strong seasonal conditions have underpinned a sharp turnaround in earnings momentum
- Recent acquisitions are performing better than expected
- Business investment and stronger YoY trends in livestock support ELD's growth
- Elders is positioned to hit the upper end of its FY24 guidance range
- Positive outlook for strong growth into FY25 and beyond
- Strong balance sheet and accretive M&A present upside to base-case earnings assumptions
Summary
Blackwattle Investment Partners
30 Apr 2024
$8.36
- Blackwattle Investment Partners continues to hold their position in Elders Ltd despite a recent 10% share price drop due to lowered FY24 earnings expectations.
- The initial investment was made in October last year when the Bureau of Meteorology's incorrect El Nino prediction led to a significant discount to intrinsic value.
- The BOM's subsequent reversal of its prediction acted as a catalyst for Elders' share price re-rating towards its typical midcycle valuation range.
- The recent earnings downgrade is attributed to lost sales from September, where farmers reacted to the BOM's incorrect guidance.
- Blackwattle expects the Elders share price to recover and track back towards its mid-cycle value, projected to be above $10.
- Elders is characterized as the 'Bunnings of the Bush', benefiting from its dominance in rural Australia and effective vertical integration strategies.
- The company is supported by top-tier management, enhancing its long-term growth prospects.
Summary
Oracle Advisory Group
31 Dec 2023
$7.39
- Oracle Advisory Group sold their investment due to recent deterioration in Elders’ main business segments.
- The crop outlook for the summer is poor, impacting expected revenue.
- There has been a notable decline in crop protection sales.
- Lower cattle and sheep prices have further affected profitability.
- Numerous unpredictable variables are influencing Elders’ sales performance.
- As a result, Oracle Advisory Group decided to move on from this position.
Summary
Montgomery Investment Management
31 Aug 2023
$6.34
- Montgomery Investment Management sold their investment in Elders (ASX:ELD) due to unexpected performance detractors.
- The position was initially profitable, held since 2017, and supported by a successful turnaround plan.
- Elders' management improved the balance sheet and achieved solid growth despite challenging weather conditions.
- In November 2022, Elders reported over 30% revenue and profit growth, benefiting from favorable weather.
- The retirement of the long-standing CEO caused a significant sell-off in Elders' stock.
- Despite the team's belief that the sell-off was an overreaction, holding the position proved to be a mistake.
- At the May 2023 result, while revenue grew, profits fell significantly due to management losing control of costs.
- The decision to exit the position was made to avoid further losses, with lessons learned for future investment strategies.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"It seems that Elders Ltd is poised for a rebound; the recent share price dip appears more a reflection of misjudged weather forecasts than underlying demand. With its strong market position and resilient management, a return to mid-cycle valuations above $10 seems inevitable."
Last Updated: 31 Jul 2025
Query The Data
Frequently Asked Questions
Who is investing in Elders Ltd (ASX:ELD)?
Fund managers including Blackwattle Investment Partners, Ausbil, Oracle Advisory Group, Centennial Asset Management, Montgomery Investment Management, Wilson Asset Management, Pendal Group and Milford Asset Management have invested in Elders Ltd (ASX:ELD).
Why do fund managers invest in Elders Ltd?
Fund managers invest in Elders Ltd due to its dominant market position in rural Australia and strong management. Despite a recent earnings downgrade linked to past sales impacted by inaccurate weather predictions, they believe the company's share price is undervalued. Expectations of recovery towards its typical mid-cycle valuation above $10, driven by restored demand, further support their investment rationale.
What happened to Elders Ltd (ASX:ELD)?
Fund managers are investing in Elders Ltd due to improving Australian agribusiness conditions, including beneficial rainfall and rising livestock prices, which are enhancing client sentiment and supporting sales of agricultural supplies. The company's potential acquisition of Delta Agriculture is seen as a catalyst for future growth, with anticipated synergies providing significant upside. Despite facing cyclical low earnings and operational challenges, the overall outlook suggests that the market may be undervaluing Elders, making it an attractive investment opportunity.