UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on The Andersons on Higher Earnings Power

In a report published Friday, BMO Capital Markets reiterated its Market Perform rating on The Andersons ANDE, and raised its price target from $40.00 to $52.00. BMO Capital Markets noted, “ANDE is taking the appropriate steps to navigate the difficult operating environment and improve its earnings power. In addition, the combination of recent acquisitions and a rebound in US crop production would significantly improve ANDE's earnings outlook. That said, we remain on the sidelines as ANDE's near-term earnings outlook remains challenged and dependant on variable factors, while its stock price has begun to anticipate a rebound in the US crop. First, Grain fundamentals likely will deteriorate over the next six months as crop supplies continue to tighten and an improvement is reliant on unpredictable arbitrage opportunities. Second, despite the recent improvement in ethanol margins, the sustainability of stronger ethanol margins is somewhat uncertain as producers tend to increase production as margins improve and ethanol supplies remain somewhat burdensome. Third, underlying Rail fundamentals remain favorable; however, ANDE's earnings are significantly impacted by the trajectory of rail car sales, which varies from quarter to quarter.” The Andersons closed on Thursday at $46.73.