Citi raises SLC Agrícola target by 24.1% to R$18

On Wednesday, 16 September, Citi raised its price target for Brazilian agricultural producer SLC Agrícola from R$14.50 to R$18. The revision represents a 24.1% increase, though the bank maintained its neutral rating on the stock after previous cuts in June and July.

The bank updated its financial model with second-quarter 2026 data alongside new macroeconomic and commodity forecasts. Citi lifted its EBITDA estimates for 2027 and 2028, pointing to lower production costs than previously projected and higher agricultural commodity prices.

Citi noted that commodity gains partly reflect worries over a potential Super El Niño. While that weather pattern may support crop prices, it poses productivity risks for SLC Agrícola during the 2026/27 harvest across Brazil. The bank also highlighted limited short-term cash flow, estimating a recurring free cash flow yield of 1% to 3% in 2026 and 2027, with an enterprise value to EBITDA multiple between 6.4 and 6.6 times.

The bank added that grain and cotton prices could outperform if certain supply risks intensify. Those factors include drought in the United States, potential Black Sea disruptions, higher polyester prices, and rising grain production costs driven by energy and fertilizer expenses.