Market Overview

UPDATE: Oppenheimer Downgrades China New Borun; Removes PT

Share:

According to a research report published today, Oppenheimer has downgraded China New Borun (NYSE: BORN) shares from Outperform to Perform, and has removed its $7 PT.

“BORN grew 4Q11 revenue by 60.4%, exceeding our/Street estimates and guidance. Sales of crude corn oil, which BORN started in 1Q11, grew 64% quarter over quarter and made up 8.1% of revenue. However, an overall ASP increase could not catch up with the pace of cost increases, which led to 854/208bps year over year/qoq declines in gross margin. Gross margin has been shrinking for five consecutive quarters to a historically low 15.8% in 4Q11. Net income grew only 3.6% in 4Q, despite 60.4% growth in sales. We decide to move to the sideline, as we foresee margin pressure continuing in 2012 due to high corn prices (see Exhibit 1 of our full report, dated March 9) and intense competition,” Oppenheimer commented in the report.

China New Borun is currently trading at $2.83.

Posted-In: OppenheimerAnalyst Color Downgrades Price Target Analyst Ratings

 

Related Articles (BORN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

IBD 50's Top Five Companies For Expected Earnings Growth

UPDATE: Rodman & Renshaw Raises Target to $45 on Approach Resources