Source: Sharecast
Berenberg said the combination of rising population growth and increasing urbanisation, most notably in developing markets, had created "a substantial increase in demand" for protein in recent years, which it thinks looks set to continue.
"With Genus focused on increasing the productivity and efficiency with which this protein is produced, the long-term drivers underpinning the business model look strong," said Berenberg, which also noted that Genus looked "well positioned to benefit" from the consolidation and professionalisation of the farming industry.
The German bank also believed that China represents "a substantial medium-term opportunity" for Genus, given the current low level of genetic sophistication in the country's farming industry.
Berenberg added that Genus' "potentially transformative" gene editing technology offers "significant medium term upside" beyond its current estimates, in our view.
"Genus trades at 18.4x 2027E EV/EBIT and 23.1x P/E. We value Genus using a DCF for the core business, before adding a discounted and probability-weighted valuation of the company's gene editing programme," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com