Now could be a good time to pounce on one ASX 200 dividend share after significant weakness.
That's the view of analysts at Bell Potter, which see potential for some strong returns in the next 12 months.
The share in question is agribusiness company Elders Ltd (ASX: ELD).
On Monday, it released its half year results and disappointed the market with below consensus earnings.
Although Elders reported a 67% increase in underlying earnings before interest and tax (EBIT) to $64.3 million, this fell short of the consensus estimate of $73 million.
Elders CEO, Mark Allison, revealed:
Performance was impacted by prolonged dry conditions in some key cropping regions, causing lower rural products sales, but balanced by high demand and prices for livestock, which drove a significant improvement from the prior corresponding period and a strong first half overall.
Following yesterday's decline, the ASX 200 dividend share was down 26% since this time last year.
The team at Bell Potter was pleased with Elders' performance and believes that the tide is turning for the company.
In response to its half year results, the broker said:
Operating revenue of $1,413m was up +5% YOY (vs. BPe $1,564m). EBIT of $64.3m was up +67% YOY (vs. BPe of $65.2m), with a higher-than-expected contribution from real estate agency and wholesale being offset in large by a weaker contribution from retail. Underlying NPAT of $38.3m was up +165% YOY (vs. BPe of $31.8m) and benefited from a lower-than-expected tax rate.
As for its outlook, Bell Potter commented:
Key outlook comments: (1) Average winter crop forecast with some lost sales in 1H25 possibly falling into 2H25; (2) The outlook for livestock is sound with the potential for higher 2H25 pricing; (3) The outlook for real estate remains positive; and (4) the ACCC will release findings on the Delta acquisition on 29/05. There are no material changes to our NPAT forecasts (i.e. < +/-1%).
In light of the above, Bell Potter has retained its buy rating and $9.10 price target on the ASX 200 dividend share. Based on its current share price of $6.20, this implies potential upside of 47% for investors over the next 12 months.
In addition, it is forecasting a 50% franked 5.8% dividend yield in FY 2025 and then a fully franked 7% dividend yield in FY 2026.
Commenting on its buy recommendation, the broker concludes:
Our Buy rating is unchanged. Seasonal conditions look broadly comparable to a year ago, with three-month rainfall projections crucial for crop development. In addition, the strong tailwinds witnessed in livestock through 1H25 have continued into 3Q25. Closing the Delta transaction is perhaps the largest catalyst for ELD, if successful a rerating to its historical ~8.5x EBITDA multiple would imply a share price more aligned to our $9.10ps target price than current trading levels.
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