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(Sharecast News) - Analysts at Berenberg maintained their 'buy' rating on Genus on Tuesday as it said the animal genetics firm's latest trading update showed strong momentum across the business, prompting another upgrade to fullyear guidance and extending what the broker described as a sustained run of improvements since early 2025.
Genus now expects around 98m of adjusted pretax profit for FY26, including a 5.6m milestone payment from its Chinese jointventure partner BCA, compared with current consensus of roughly 95m. Berenberg said the uplift reflected continued strength in the core PIC porcine division and the ongoing turnaround in ABS bovine, alongside very strong freecashflow generation. Following receipt of 111m from the formation of its Chinese porcine JV, yearend net leverage was set to fall to 0.4x, down from 1.5x a year earlier.
Berenberg, which also kept its 3,350p target price on the stock, noted that trading in H226 was ahead of expectations, with PIC delivering robust growth in Asia and Latin America, more than offsetting a difficult disease season in North America. ABS posted doubledigit profit growth as its turnaround continued, despite softer demand and a weaker product mix linked to lower global dairy prices.
The German bank highlighted "standout" cash conversion in the second half, delivering significant yearonyear growth in free cash flow and extending the improved trajectory under Genus' new chief financial officer. Free cash flow to equity rose to more than 40m in FY25, compared with a cumulative outflow of around 10m between FY22 and FY24.
Berenberg also said the latest upgrade demonstrated the increasing resilience of the business, driven by marketleading genetics, a continued shift towards royaltybased revenues and broader geographic diversification, including strong growth in Asia and a significant longterm opportunity in China.
Reporting by Iain Gilbert at Sharecast.com
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