RURAL FUNDS GROUP (RFF)
Share Price Analysis and Chart

Broker commentary and detailed analysis is available for Full Members Only.
Login above or Get a Free Trial

24/02/2025

1

Buy

$2.50

41.24%

Rural Funds reported 1H25 funds from operations that were slightly in excess of Bell Potter's forecast, with revenue growth of 18% year-on-year and funds from operations increasing by 44%.

The dividend per share of 5.87c was as expected. Management guidance has been maintained at a dividend of 11.73c per unit, the broker notes.

Buy rating and $2.50 target retained. The analyst highlights the discount to NAV is the highest it has been since listing at -45% versus a premium of 6% at some stages, which reflects a number of assets with "underearnings."

The discount is viewed as too high given the expected "resilience" in farming assets and emerging funding for macadamia development, Bell Potter states.

FORECAST
Bell Potter forecasts a full year FY25 dividend of 11.70 cents and EPS of 11.40 cents.
Bell Potter forecasts a full year FY26 dividend of 12.20 cents and EPS of 12.00 cents.

26/02/2025

1

Overweight

$2.51

41.81%

Rural Funds' adjusted funds from operations (AFFO) in 1H25 beat Wilsons' forecast by 17% on stronger farming and other net income, though the broker comments this was largely due to timing differences.

Gearing increased modestly to 38.6% from 38.6% in FY24, but the broker sees potential for a material reduction, which would be a key share price catalyst along with growth resumption.

Wilsons made minor changes to property and farming revenue, leading to minor shifts in FY25-26 AFFO forecasts. 

Target price rises to $2.51 from $2.43 on a roll forward in the base year to FY26. Overweight rating.

FORECAST
Wilsons forecasts a full year FY25 dividend of 11.70 cents and EPS of 11.40 cents.
Wilsons forecasts a full year FY26 dividend of 11.70 cents and EPS of 12.10 cents.