FY24 Australian Agriculture Data Bode Well for Food Sector

This report is an updated version of the report published on 19 June 2025 at 1:43 PM AEST.

Company Overview

Company Overview: Australian Agricultural Company Limited (ASX: AAC) is an Australia-based beef and integrated cattle producer. The company is engaged in selling and marketing branded beef globally, along with developing coastal properties, breeding backgrounding, and feed lotting across Australia. Select Harvests Limited (ASX: SHV) is an ASX listed producer of almond products for retail and industrial markets.  Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Drivers

Australia’s food sector is a vital part of the economy, spanning agriculture, food manufacturing, and exports. Renowned globally for its clean, safe, and high-quality produce, the sector benefits from strong biosecurity standards, free trade agreements, and rising demand from Asia’s growing middle class. It includes diverse segments such as meat, dairy, grains, horticulture, and packaged foods. While challenged by climate variability, labour shortages, and supply chain disruptions, the sector is supported by technological innovation, sustainability initiatives, and evolving consumer preferences toward health and ethically sourced products. It remains a key driver of rural employment and export earnings.

Sector Catalysts

Index Performance

Investment theme and stocks under discussion (AAC, SHV)

After understanding the sectors, let us now look at two companies from the Food sector listed on the ASX. The price potential of the companies under discussion have been analysed based on Price/Cash Flow Per Share based relative valuation methods.

1. ASX: AAC (Australian Agricultural Company Limited)

(Recommendation: ‘Speculative Buy’ at AUD 1.380; Potential Upside: Low Double-Digit; MCap: AUD 834.83mn)

Australian Agricultural Company Limited is an Australia-based beef and integrated cattle producer. The company is engaged in selling and marketing branded beef globally, along with developing coastal properties, breeding backgrounding, and feed lotting across Australia.

The stock has witnessed a correction of ~6.08% in last one month, and over the past three months, it has declined by ~7.33%. The stock has a 52-week low and 52-week high of AUD 1.330 and AUD 1.575, respectively and is currently trading below the 52-week high-low average.  AAC was last covered in a report dated ‘26 February 2025’.

2. ASX: SHV (Select Harvests Limited)

(Recommendation: ‘Speculative Buy’ at AUD 4.310; Potential Upside: Low Double-Digit; MCap: AUD 615.32mn)

Select Harvests Limited is an ASX listed producer of almond products for retail and industrial markets.

The stock has witnessed a correction of ~9.94% in last one month, and over the past three months, it has declined by ~15.31%. The stock has a 52-week low and 52-week high of AUD 3.420 and AUD 5.450, respectively and is currently trading below the 52-week high-low average.  SHV was last covered in a report dated ‘10 April 2025’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 19 June 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.