Adecoagro upgraded to Overweight with $13 target at Morgan Stanley

Morgan Stanley analyst Javier Martinez De Olcoz upgraded Adecoagro to Overweight from Equal Weight with an unchanged price target of $13. The analyst believes Adecoagro is a good way to play the firm’s view on grains. The firm sees lower soy and corn prices ahead given warm and dry weather hitting summer crops in the U.S., the depressed profitability of farmers in Brazil, and the possible arrival of El Nino next month. Adecoagro is well positioned in Argentina, which should benefit from El Nino weather amid a recovery from a severe drought in 2022 and 2023, the analyst tells investors in a research note. The firm views the stock’s “valuation gap” as favorable and says there is the possibility of regime change in Argentina, which was positive for share price performance the last time it happened.