Davenport Raises Price Target on Bunge (BG) to $160

Davenport & Co. raises its price target on Bunge Limited (NYSE: BG) from $140 to $160 and maintains a Buy rating. With shares of Bunge trading around $11.40 today, the firm's price target represents a potential return of more than 40% from current levels.

The firm said yesterday's announcement from Bunge that it will acquire Corn Products (NYSE: CPO) "supports our belief that we will continue to see consolidation across the Ag space as companies seek to capture strong presence in different commodity segments." Davenport calls the combined companies "a larger, more diversified and competitive global provider of agribusiness and food products..."

Davenport believes investors "overreacted to the current heightened concerns surrounding corn prices" and sees the acquisition of Corn Products as a great way for Bunge to diversify its product offering and geographies, also establishing a "new growth platform for Bunge into higher margin sweeteners and starches."

As Bunge raised its FY08 EPS guidance from $7.10-$7.40 to $9.35-$9.65, Davenport also raised its outlook from $7.40 to $9.50. The firm notes that it has raised estimates by over 50% since the beginning of 2008.

Bunge Limited engages in the agriculture and food business.

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