DAVY VIEW

Origin’s Q1 statement confirms a strong start to the year. An early harvest and favourable on-farm sentiment helped underpin mid- to high-single-digit volume growth (off an elevated comparative), with strong pricing across the product portfolio. Ahead of the key application season, crop plantings are expected to be in line with the prior year. Despite the volatile operating backdrop, the outlook statement strikes a constructive tone. As such, we will increase our FY 2023 adjusted EPS by 4% (2c) to 48.7c. Key watchpoints for the second half include nutrition pricing/market dynamics and the weather. On our revised forecasts, the equity is trading on a 7.5x P/E, which we feels offers a substantial margin of safety.