Noble

Noble: HSBC keeps at Neutral, lowers TP to $1.07 from $1.22. Notes Agri segment pressures will continue to be a major headwind through the medium term, with 1Q13 showing the segment’s first operating loss. Besides the weak sugar business, lower utilization levels at the Argentinean soybean crushing plants were a key driver, due to difficulties in obtaining sufficient feedstock, as farmers horde supplies and go on strike, amid unfavorable domestic economics. Moreover wheat prices on the Buenos Aires Exchange are trading at a near 60% premium to soybeans, incentivizing farmers to switch crop. Given Noble’s participation in bulk agriculture where pdt differentiation is low, the house believes margins will continue to surprise on the downside. Lowers FY13-15 agri gross profits per ton by 16-18% to reflect these issues, which then impact earnings by 14-15%.