BUNGE GLOBAL SA (BG): what the price assumes

In the published model solve dated 2026-Q2, anchored at $115.63, BUNGE GLOBAL SA (BG) is priced for +10.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/BG

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 6.2% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.5%); the inversion above states its own rate.

Per-Model Detail (n=9)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Two years of dealmaking left Bunge running an oilseed and grain network roughly the size of ADM's by revenue, with the FY2025 10-K attributing 15.3 billion dollars of 2025 net sales to Viterra alone from a July 2 closing date.
• The whole business turns on processing spreads it does not set, and the trailing evidence is thin: return on equity of about 4.3% sits under the roughly 9% return equity investors require, with interest coverage of about 1.9.
• Second-quarter results land July 29, 2026 before the open, the first clean read on whether the acquisition is showing up in segment profit rather than only in revenue.

Bull Case

The direction in the most recent quarter is not subtle. In Softseed Processing and Refining, the March 2026 10-Q reports that "Net sales increased 158% to $3,904 million for the three months ended March 31, 2026." Volume moved with price rather than behind it: the same filing credits "higher volumes of soybeans merchandised in Brazil, due to higher farmer selling, and increased processed volumes in North America as a result of the current market environment". Part of that step-up is the acquisition arriving in the comparison and part of it is the market itself, and separating the two is the work of the next several prints. What is not in dispute is throughput. More tonnes are moving through the plants than a year ago, into end markets that want more vegetable oil and more protein meal.

What the Viterra deal actually bought was not a brand or a customer list. It was the half of the chain Bunge did not own. Following the close the company "changed our reportable segments to align with our new value chain operational structure as a result of the completion of the Acquisition of Viterra", and it now runs "four reportable segments: Soybean Processing and Refining, Softseed Processing and Refining, Other Oilseeds Processing and Refining, and Grain Merchandising and Milling". That reorganisation is the thesis in administrative form. When origination sits next to crushing and refining, the same bushel can earn a margin twice, and the company gets to choose which link in the chain to take the margin at depending on where the spread happens to be that month. A pure processor has no such choice.

The physical network behind that is slow and costly to replicate. The 10-K describes a business that, "To better serve our customer base and develop our global distribution and logistics capabilities, we own or operate, either directly including through leases or through joint venture arrangements, various port terminal facilities" across its origination regions. Keeping that network current is not cheap, and management is explicit about the bill: "We intend to make capital expenditures in the range of $1.5 billion to $1.7 billion in 2026." The stated intent behind it is unglamorous and, for a bull, reassuring: "Our priorities for 2026 are to maintain the cash generating capacity of our assets through non-discretionary projects, such as maintenance, safety and compliance, as well as discretionary investments in growth and productivity projects".

Scale is now the argument, because in this industry scale is most of the margin. ADM carries $80.58B of trailing revenue on a profit margin of 1.3%; TSN turns $55.71B into a 2.07% operating margin. Those are not typos, they are the economics of moving agricultural bulk. A business that clears roughly 80.5 billion dollars of revenue on spreads that thin lives or dies on utilisation, freight cost, and the ability to shift product between destinations when a trade route closes. Bunge's revenue base now sits alongside ADM's, which means it buys, ships, and crushes on the same terms the largest player in the industry does. Two years ago it did not.

The honest concession is that none of this sets the crush spread. Bunge earns what the gap between oilseed cost and meal-plus-oil revenue allows, and that gap is set by harvests, biofuel policy, and Chinese buying. The bull case does not require Bunge to control it. It requires the company to be the lowest-cost route between a farmer in Mato Grosso and a refiner in Rotterdam, and to hold that position through a cycle in which weaker processors give up capacity. Scale of this kind pays most clearly when spreads are bad, which is precisely when the argument is hardest to make.

Bear Case

Someone paid for the growth, and it was the existing shareholders. The share count has compounded at about 8.7% a year over the three years to March 2026, which is what happens when a company issues its own stock to buy something roughly its own size. The Viterra purchase price does not appear as an interest expense or a covenant; it appears as a permanently larger denominator under every future dollar of profit. That is a legitimate way to fund a deal. It also means the per-share case now depends on the combined company earning materially more than the two halves did apart, and the burden of proof sits with management rather than with the sceptic.

The capital return plan lands on top of that. The board has proposed a 2026 dividend of $2.88 a share in four quarterly instalments of $0.72, alongside a new 3 billion dollar share repurchase authorization. Set that against the obligations the deal left behind. The FY2025 10-K states that "The aggregate fair value of our short and long-term debt, based on market yields at December 31, 2025, was $14,104 million with a carrying value of $14,051 million." Interest coverage sits at about 1.9, which means the trailing operating result covers the annual interest bill not quite twice over. Repurchasing shares issued eighteen months earlier is not incoherent, but the sequencing puts buybacks and a rebuilt balance sheet in competition for the same cash in a year when nobody knows what the crush spread will do.

That matters because the trailing return on capital does not currently defend the price. Book value stands at about 82 dollars a share. What the business earned on that book over the last twelve months was a return on equity of about 4.3%, well short of what an owner of a cyclical processor would ask of it. A company earning less on its book than its owners want is one whose book gets marked down, not up, by the methods that read assets and current profitability. The price leans the other way: at roughly 36 times trailing operating profit it needs something on the order of 7.6% annual operating growth to persist for five years. That solve rests on fixed assumptions about the cost of capital and how fast growth fades, so treat the figure as a direction rather than a measurement. The direction is clear enough. The multiple is at the very top of its peer distribution, and it is being paid for a recovery that has not yet shown up in returns on equity.

The operating risks that could stall that recovery are named in the filings. Bunge advances capital to Brazilian growers ahead of harvest, and the 10-K warns that "our business and financial results may be adversely affected if these farmers are unable to repay the capital advanced to them". Working capital shows the same exposure in a different form: soybean processing inventories climbed to $7,480 million at March 31, 2026 from $5,378 million at the end of 2025, which is a large bet on where oilseed prices go between purchase and sale. And the acquisition brought goodwill that has to be tested every year. On the Grain Merchandising unit the 10-K notes plainly that "Changes in judgment related to these assumptions and estimates could result in goodwill impairment charges."

A fair bear grants that spreads are currently favourable and that synergy capture from a deal this size genuinely does lower unit cost. The counter is timing. Every element of the bull case, integration savings, network optimisation, higher utilisation, arrives over years, while the commodity cycle turns in quarters. If the spread normalises before the savings land, holders are left owning a leveraged, recently diluted processor at a top-of-cohort multiple, with the asset-based methods marking the price down to book value and change.

Valuation

The methods do not agree here, and the shape of the disagreement carries more information than any single one of them. Peer-multiple approaches and the forward-growth approach both land above today's price of $121.46. The asset-value methods land nowhere near it: the price sits at roughly four times where that family of method centres, and the earnings-power methods put the price about 75% above where they land. A stock is rarely cheap on one lens and stretched on another by that margin, and the reason is worth spelling out, because it is the whole valuation question.

It comes down to one relationship. Book value stands near 82 dollars a share, so measured on assets alone the price is not extreme. The trouble is what the company earns on that book. Return on equity over the trailing twelve months came to about 4.3%, thinner than the risk in a commodity processing business justifies, and every method built on book plus profitability treats that shortfall the same way: it marks the book down rather than capitalising it. Those methods are not calling Bunge a bad business. They are reporting that over the last twelve months the company did not earn its cost of equity, and that on the evidence in hand a dollar of Bunge's book is worth less than a dollar.

The methods that do reach the price get there by extrapolation. One carries the revenue growth rate of recent years forward on a tapering path with today's price-to-sales ratio held flat; another applies the recent pace of earnings growth to trailing earnings per share of $4.29. Both are mechanically correct and both are measuring the acquisition rather than the business. The FY2025 10-K attributes 15.3 billion dollars of net sales to Viterra for the year ended December 31, 2025, from a July 2 close, and the March 2026 quarter's Softseed net sales rose 158% on the same driver. Growth rates built on a step-change in company size do not repeat unless the company buys something of similar scale again.

Inverting the price gives a cleaner statement of the bet, though not a precise one. At roughly 36 times trailing operating profit, the price embeds something like 7.6% a year of company-wide operating growth sustained over a five-year stage, on fixed assumptions about discount rate and fade that move the answer around when they move. The rate itself is not the stretch; Bunge has delivered growth at that pace before. The stretch is the persistence, and the fact that the multiple being paid for it sits at the very top of the peer distribution rather than in the middle of it.

Against that cohort the comparison is unusually direct. ADM carries $80.58B of trailing revenue, down 3.9% year over year, on a 1.3% profit margin. Bunge now operates at nearly the same revenue base, in overlapping crops and destinations, having reached it by acquisition rather than by growth. What separates them is the balance sheet: the 10-K reports a carrying value of short and long-term debt of "$14,051 million" at December 31, 2025, interest coverage of about 1.9, capital expenditure planned at "$1.5 billion to $1.7 billion in 2026", and a share count that has risen about 8.7% a year for three years. The downside here is bounded by hard assets, port terminals and crush plants and grain elevators, not by cash. That is a different kind of floor from the one a net-cash balance sheet provides, and it is the one the buyer at today's price is standing on.

Catalysts

The next scheduled event is the second-quarter print. Bunge will report results for the quarter ended June 30, 2026 on Wednesday, July 29, 2026, before the market opens, with a management call the same morning. This is the third full quarter with Viterra inside the consolidated figures, which makes it the first print where the year-ago comparison starts to isolate operating performance from the arithmetic of the acquisition. The specific thing to watch is segment profit rather than the revenue line, since revenue growth has been carrying the acquisition's own weight for three quarters now.

The company enters that print with a run of positive surprises behind it. Bunge's reported earnings have come in above consensus in each of the trailing four quarters, with an average surprise of 27.5%. A streak like that says as much about how hard this business is to model from the outside as it does about execution: analysts are forecasting a spread between two commodity prices across four continents, and the error bars on that are wide in both directions.

Capital return is the other live decision. The board has put forward a 2026 dividend of $2.88 a share, paid in four quarterly instalments of $0.72 from the Swiss reserve from capital contributions and exempt from Swiss withholding tax, together with a new 3 billion dollar repurchase authorization. Both are proposals rather than executed cash, and the pace at which the repurchase is actually drawn down will be the clearest signal management sends about how confident it is in the balance sheet it built.

Peer Cohorts (Per Segment, With Filing Citations)

Soybean Processing and Refining / Softseed Processing and Refining +2 more (reported)

• ADM (ARCHER-DANIELS-MIDLAND CO)
• FY2025 10-K: …of segment profit or loss. Separate financial information for the Company's three reportable segments is evaluated by the CODM on a monthly basis to allocate resources and assess performance. The CODM does not use total assets by segment to make decisions regarding resources; therefore, the total asset disclosure by…
• FY2025 10-K: …for chemical, paper, and other industrial markets. In addition, its integrated grain sourcing, handling, and multimodal transportation network supports global import, export, and distribution activities and provides essential services to customers and the Company's processing operations. The Company also engages in…
• INGR (INGREDION INCORPORATED)
• FY2025 10-K: …Some natural high-intensity sweeteners, such as stevia, provide a sweetness or functional alternative to full-caloric sweeteners for our customers. Some food and beverage customers seek these alternatives for their reduced-calorie or sugar-free foods and beverages. Our sweetener products represented 34 percent, 35…
• FY2025 10-K: …sugar prices indirectly impact the price of corn sweeteners, especially high fructose corn syrup. Furthermore, co-products such as corn oil and gluten meal compete with products of the corn dry milling industry and with soybean oil, soybean meal and other products, the price of some of which may be affected by…
• TSN (TYSON FOODS, INC.)
• FY2025 10-K: …are excluded. (2) Capacity per week is not an indication of production rates. Capacity per week is based on the following: Beef and Pork (six day week) and Chicken and Prepared Foods (five day week). Utilization of capacity varies by facility based on the type of products assigned and the level of demand for those…
• FY2025 10-K: …and procurement arrangements with producers to secure a supply of livestock for our facilities. Although we generally expect adequate supply of live cattle in the regions we operate, there may be periods of imbalance in supply and demand. The U.S. cattle market is currently experiencing limited supply of market-ready…
• SFD (SMITHFIELD FOODS, INC.)
• FY2025 10-K: …feed production and feed storage in the U.S., which are located near our farms, where we convert purchased grain into feed for our animals. Feed grains are readily available from numerous sources at competitive prices, and we believe such raw materials to be in adequate supply. We take an active role in the physical…
• FY2025 10-K: …all of the hogs produced by this segment are processed by our Fresh Pork segment. The Hog Production segment also sells livestock feed and grains and provides transportation and other ancillary services to external customers. 2 Other Segments Mexico. In Mexico, we own a 66% interest in Granjas Carroll de Mexico, S.…
• PPC (PILGRIM’S PRIDE CORPORATION)
• FY2025 10-K: …results of operations. We will continue to monitor potential impacts and take mitigation actions as necessary. We generally respond to these challenges in global economic conditions through discussions with customers to mitigate the impact of extraordinary costs we experience. We also continue to focus on operational…
• FY2025 10-K: …Consequently, there can be no assurance that the price of grains will not rise as a result of, among other things, increasing demand for these products around the world and alternative uses of these products, such as ethanol and biodiesel production. Volatility in feed ingredient prices has had, and may continue to…
• GIS (GENERAL MILLS INC)
• FY2025 10-K: …group of competitors. 5 Raw materials, ingredients, and packaging The principal raw materials that we use are grains (wheat, oats, and corn), dairy products, meat, vegetable oils, sugar, vegetables, fruits, nuts, and other agricultural products. We also use substantial quantities of carton board, corrugated, plastic,…
• FY2025 10-K: …an attractive dividend yield. Guided by our purpose to make food the world loves, we are executing our Accelerate strategy to drive sustainable, profitable growth and top-tier shareholder returns over the long term. The strategy focuses on four pillars to create competitive advantages and win: boldly building brands,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.