Citigroup has initiated coverage of Makhteshim Agan Industries Ltd. (TASE: MAIN) with a “Buy” recommendation with a target price of NIS 32, 32% above today’s market price. Makhteshim Agan is a subsidiary of IDB Holding Corp. Ltd. (TASE:IDBH) through Koor Industries Ltd. (NYSE: KOR; TASE: KOR).
Citigroup writes, “Makhteshim Agan has a successful long-term growth and cash generation track record.” The bank adds that the company makes products for the growing crop protection market (herbicides and pesticides), it is the world leading generic agrochemical company with 5% market share, the fourth largest agrochemical company in Europe and the seventh largest in the world.
Citibank says that Makhteshim Agan had a tough year in 2006, but says, “Higher grain prices, driven by stock levels that are at 30-year lows, set a highly positive backdrop for improved demand in 2007.” The bank adds, however, that the rate of recovery in 2007 will be modest, but will pick up in 2008.
Citibank also cites the appointment of chairman Avraham Bigger as CEO, restructuring and new products, as reasons for anticipating a recovery at the company. “He had previously transformed two companies both of which were significant in Israel, Paz Oil Company Ltd. (TASE:PZOL) (largest oil refiner and retailer) and Super-Sol Ltd. (TASE:SAE; OTCBB:SSLTF) (largest Israeli supermarket chain). Mr Bigger has an outstanding reputation for getting things done and delivering value in Israel. This is his first international job.”
IDB Holding chairman and CEO Nochi Dankner appointed Bigger as CEO of Makhteshim Agan in November, replacing Shlomo Yanai, who has been appointed president and CEO of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA).
Published by Globes [online], Israel business news - www.globes.co.il - on January 3, 2007
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