Andersons Shares Plunge 5.62% on Mixed Q1 Results

The Andersons (ANDE) shares tumbled 5.62% intraday, marking the lowest level since January 2023, with a cumulative decline of 7.59% over the past two days.

The strategy of buying ANDE shares after they reached a recent low and holding for 1 week yielded moderate returns over the past 5 years, with a 4.46% annualized gain. However, this was below the benchmark's annualized gain of 6.47%, indicating that while the strategy provided some positive returns, it underperformed the broader market.

The Andersons reported mixed first-quarter results, with strength in the Renewables segment offset by weaknesses in Agribusiness. This led to a 95% year-over-year profit decline, despite higher adjusted EBITDA. The company's Q1 revenue of $2.659 billion fell short of the anticipated $2.84 billion, and analysts expect a quarterly loss of $0.08 per share on revenue of $2.85 billion.

Analysts have mixed views on the company's prospects. BMO Capital Markets initiated coverage with a 'Market Perform' rating and a price target of $45.00, while Lake Street maintained a Buy rating with a price target of $70.00. The average target price among Wall Street analysts is $55.00, suggesting potential upside from the current price.

The Andersons is expected to face challenges in the agribusiness sector and the renewables market, which could lead to a decline in profits for 2025. However, gains from its fertilizer business and its investment in Skyland Grain are expected to offer some balance. The company reported declines in net income and adjusted net income for Q4 2024 compared to the same period in 2023. Full-year gross profit decreased by 7% due to lower ethanol margins, and the renewables segment experienced a $30 million reduction in gross profit.