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It’s been a bumper month for the Graincorp Ltd (ASX: GNC) share price, despite only a single price-sensitive announcement having been released by the company.
Since this time last month, Graincorp has gained 24.34%, growing from $7.21 to $8.97.
For context, the S&P/ASX 200 Index (ASX: XJO) has fallen 0.8% in that time.
Let’s take a look at what’s been helping to boost the integrated grain and edible oils business’ stock lately.
What’s been driving the Graincorp share price lately?
This time last month, the Graincorp share price was surging on the back of a guidance upgrade.
The company announced it had managed to dodge most supply chain issues as Australia experienced yet another bumper crop.
On top of that, supply shortages and drought conditions in the northern hemisphere sent demand for Australian grain and oil seeds soaring.
As a result, Graincorp expects to report between $480 million and $540 million of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for financial year 2022.
For comparison, it reported $331 million of underlying EBITDA last financial year.
Additionally, the company’s underlying net profit after tax (NPAT) is predicted to be in the range of $235 million to $280 million – up from $139 million.
The Graincorp share price gained 12.34% the day the company upgraded its guidance. And the market might be expecting even more from the company into the future.
As The Motley Fool Australia’s Mitchell Lawler recently reported, Russia’s invasion of Ukraine could send wheat prices soaring.
Russia and Ukraine are responsible for a significant portion of the world’s wheat exports. However, Russia’s invasion of Ukraine and resulting sanctions could hamper both production and supply of the commodity.
Thus, one expert predicted that supply and demand could see the price of wheat grow by more than 50% if the conflict continues into July. It could also see demand for Australian wheat take off.
If the commodity’s price were to increase, it could help boost Graincorp’s bottom line and, in turn, its shares.
The post Here’s why the Graincorp (ASX: GNC) share price has rocketed 24% in a month appeared first on The Motley Fool Australia.
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Before you consider Graincorp, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Graincorp wasn’t one of them.
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More reading
- Top brokers name 3 ASX shares to sell today
- 5 things to watch on the ASX 200 on Thursday
- 3 ASX shares that could get a slice of a record $81bn farm output this year
- Here’s why the Graincorp (ASX:GNC) share price jumped 5% today
- Why Core Lithium, Dicker Data, GrainCorp, and InvoCare shares are rising
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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