Plant Health Care PLC (LON: PHC)

Plant Health Care PLC is an FTSE AIM All-Share index-listed provider of proprietary biological products to global agricultural markets. It offers products to enhance the health, vigour, and yield of major field crops such as corn, soybeans, cotton, and rice.

The Company expects to announce FY21 preliminary results in April 2022.

Investment Rationale – SELL at GBX 14.00

• Profit Booking: Plant Health Care’s stock price has jumped over 38% in the past month, and therefore, investors can book profit as per their risk-return profile.
• Continued Losses: During H1 FY21, Plant Health Care continued to report operating and net losses, which can eventually impact the Company’s liquidity.
• Record UK Inflation: British inflation hit a 30-year high of around 6.2% in February 2022, which may cause a further interest rate hike. It can dampen economic growth and hamper corporate profits.
• Technical Indicator: The momentum oscillator 14-day RSI (89.17) is in the overbought zone, and the price can face retracement from the current levels.  

Recent News

New Distributor: On 1 April 2022, PHC announced the appointment of Ager Agro SAS for distribution in Argentina and Uruguay.

One Year Share Price Chart

 (Source: Refinitiv, Analysis conducted by Kalkine Group)

Valuation Methodology: EV/Sales Approach (FY22) (Illustrative)

*Peers: Itaconix PLC, Versarien PLC, and Symphony Environmental Technologies PLC.

*All peers are LSE-listed Companies from the Chemicals sector.

*1 USD = 0.76 GBP.

Conclusion

Based on the attractive notional gains in the short-term, continued losses, macroeconomic instabilities, bearish technical indicators, coupled with the unfavorable Valuation conducted above, we have given a "SELL" recommendation on Plant Health Care PLC at the current market price of GBX 14.00 (as of 6 April 2022, at 8:56 AM GMT+1).

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and is subject to the factors discussed above.

Note 3: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 4: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 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.

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