JPMorgan has kicked off coverage of Genus PLC (LSE:GNS) with an above-average rating and a price target of 3,200 pence for December 2027 on Thursday, citing attractive mid-term growth prospects driven by the company's genetically edited pig program. $MEGA
The institution expects Genus to deliver approximately 14% growth in adjusted operating profit from 2027 to 2030, supported by its core swine and bovine genetics businesses and the rollout of its PRRS Resistant Pigs offering in North America. $ALLO
JPMorgan assigned a 70% probability of success to PRP commercialization, assuming adoption rates will be more gradual than management's expectations. The target price implies approximately 41% appreciation relative to the closing price of 30 April at 2,344 pence.
JPMorgan expects regulatory approvals in key U.S. pork export markets to unlock broader marketing in North America, with approval in Mexico anticipated in the second half of 2026 and in Japan for the first half of 2027.$BR
The institution projects that PRP could contribute approximately £60 million in incremental revenues and £51 million in incremental EBIT by the fiscal year 2035, representing about 26% of the group's operating profit after risk adjustment.
For the fiscal year 2026, JPMorgan expects group revenues of £647 million, a 4% drop, and adjusted operating profit of £86 million with a margin of 13.3%. The institution noted short-term pressures on global milk prices and lower profitability for pork producers in Europe and Asia, but anticipates that the stock discount to net present value will diminish as regulatory milestones are achieved.
The main risks include regulatory delays, market acceptance of genetically edited products, disease outbreaks, and shifts in consumer preferences towards alternative proteins, said JPMorgan. The institution's optimistic scenario suggests a net present value of £36 per share, implying approximately 59% appreciation, should PRP adoption align with management's assumptions.
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