Miller Tabak Reiterates Buy Rating, $80 PT on Bunge Limited

In a report published Friday, Miller Tabak + Co. reiterated its Buy rating and $80.00 price target on Bunge Limited

. Miller Tabak noted, “This morning, Bunge announced that it had reached an agreement to sell its remaining fertilizer business in Brazil to Yara for total consideration of $750mn in cash. We recall that Bunge had previously sold its wholesale fertilizer mining assets in Brazil to Vale S.A. for roughly $3.8 billion in cash in January 2010. Bunge currently operates 22 blending (NPK retail products) and achieved sales volumes of 4.8mn tons and EBITDA of $77mn in 2011. The transaction value of $750mn is derived by applying a multiple to the underlying EBIT generated from the business + the asset value of Bunge's remaining fertilizer assets (excl. existing fertilizer port terminal in Port of Santos) and undeveloped land rights for potential port expansion. In our view, the downstream fertilizer segment wasn't' a long-term area of core competency and we welcome this strategic move on the part of Bunge.” Bunge Limited closed on Thursday at $72.05.