UPDATE: Barclays Starts Benson Hill, Inc. (BHIL) at Overweight
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Barclays analyst Benjamin Theurer initiates coverage on Benson Hill, Inc. (NYSE: BHIL) with a Overweight rating and a price target of $10.00.
The analyst comments "BHIL is well positioned to address different stakeholders' needs with a more efficient and profitable crop: With its proprietary seed technology platform, CropOS, BHIL combines data science, plant science, and food science to create better seeds, leading to improved food, ingredients, and feed products. Its involvement throughout the supply chain with different stakeholders, from farmers to customers, is in our view a key advantage versus its peers.The need for a better seed to feed the world: A growing population will require higher amounts of feed, with a detrimental impact on natural resources and environmental welfare. The company's ESG-minded approach, coupled with a focus on traceability, represents an innovative step in a space not fully developed yet.While history is still scarce, the outlook is promising: For FY21, our sales forecasts are 13.4% above guidance, given the company's solid results YTD. Our FY22 revenue estimates are mostly in line with guidance, but our LT assumptions are more cautious. BHIL's estimates are partially driven by solid expected growth in the Partnerships/ Royalties business and its contribution to margins, which we consider could help performance albeit at a slower pace. BHIL expects to post positive EBITDA by FY25; we take a more cautious stance and estimate this to take place by FY27.Risks include: 1) Missing growth opportunities while adapting to technological changes, increased competition, and a lack of access to additional funding; 2) adverse regulation that could slow industry growth or BHIL's outlook, or impose higher costs and thus impact profitability; 3) adverse weather and natural conditions that could impact crop size and quality; and 4) changes in consumption that do not support Benson Hill's model."
Shares of Benson Hill, Inc. closed at $6.52 yesterday.
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