Olam: Deutsche upgrades to Buy from hold, raises target to $3.60 from $2.68. Says Olam’s integrated value chain should provide plenty of opportunities to broaden the customer base and product range within the agricultural sector. Believes its acquisition-led growth strategy, currently in its 3rd yr of implementation, has been value accretive so far, but the full potential of the assets will only be realized in the coming years...
In particular, estimates Africa invmts (wheat, cocoa, palm, fertilizer) could generate ~$200m profit enhancement over the next 3-4 yrs. Notes current valuation at 16x CY11 P/E is undemanding, vs historical avg of 25x P/E.
Co reports 2Q11 results today after mkt close.
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