Bunge Faces Headwinds in Q1 2025: A Preview of Challenges Ahead

Bunge Limited (NYSE: BG) is set to report its Q1 2025 earnings on May 7, 2025, against a backdrop of significant headwinds that analysts expect will weigh on both revenue and profitability. With consensus estimates pointing to a 4.5% revenue decline to $12.8 billion and a 58% plunge in earnings per share (EPS) to $1.27 compared to the same quarter last year, investors will be watching closely for signs of stabilization in the global agricultural commodities landscape.

Segment-Specific Performance Drivers

Agribusiness Segment: Analysts project a 10% revenue drop to $8.76 billion, driven by lower volumes and deteriorating margins. Weakness in North American and European softseed operations—where EBIT is expected to collapse by 58% to $206 million—will overshadow modest improvements in South America. The decline underscores persistent challenges in grain merchandising and oilseed processing, which have been hit by U.S.-China trade tensions and global commodity market volatility.

Refined and Specialty Oils Segment: Revenue is expected to rise 13% to $3.65 billion, but EBIT will fall 42% to $118 million due to margin pressures across regions. Europe and Asia face supply-demand imbalances, while North America grapples with uncertainties around U.S. biofuel policies—a critical factor for Bunge’s biofuels operations.

Milling Segment: Revenue growth of 4% to $396 million will be tempered by a 18% EBIT decline to $23 million. Higher North American volumes are offset by margin squeezes in South America, where soaring raw material costs are pinching profitability.

Structural Challenges and Strategic Shifts

The loss of Bunge’s Sugar and Bioenergy division—sold in October 2024—removes a prior-year revenue contribution of $43 million and $24 million in segment EBIT. This divestiture, while part of Bunge’s strategy to focus on core operations, leaves a notable gap in Q1 2025 results compared to the same period in 2024.

Analyst Outlook and Valuation Dynamics

Zacks Investment Research’s model assigns Bunge a “Hold” rating (Zacks Rank 3) and a 0% Earnings ESP score, suggesting little confidence in an earnings beat. Historically, Bunge has beaten estimates in two of the past four quarters, with an average surprise of 3.38%, but current estimates have been stagnant for 30 days.

Bunge’s stock has risen 14.3% over the past three months, outperforming the agricultural commodities sector’s 2.2% gain. However, valuation metrics are contracting: the trailing P/E ratio stands at 9.69, while the forward P/E is 9.92—both below the sector average. This reflects investor skepticism about near-term earnings recovery amid persistent margin pressures.

Conclusion: Caution Advised Amid Persistent Headwinds

Bunge’s Q1 2025 results are likely to underscore the structural challenges facing its core businesses. With the Agribusiness segment’s EBIT projected to plummet 58% and the Refined Oils division struggling with margin erosion, investors should brace for a tough quarter. The removal of the Sugar division’s prior-year contributions further complicates year-over-year comparisons.

While Bunge’s stock has shown resilience in recent months, valuation metrics suggest the market is pricing in limited upside. With Zacks’ neutral outlook and the absence of upward revisions to estimates, investors may want to await clearer signals of stabilization in global trade dynamics and margin recovery. Bunge’s May 7 earnings call will be critical in determining whether management can pivot toward addressing these challenges or if the company remains stuck in a low-growth cycle. For now, a “Hold” stance appears prudent.